KONTAN.CO.ID - TOKYO. The dollar nursed losses against most currencies on Wednesday (10/6) amid some speculation the U.S. Federal Reserve could take steps to curb a recent rise in bond yields at its policy meeting.

The Australian and New Zealand dollars pulled back slightly against the greenback but sentiment remained positive as economic activity resumes in both countries following the lifting of coronavirus restrictions.

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The main focus is a Fed policy meeting later on Wednesday. While no major changes are expected, recent rises in yields have pushed up the dollar due to increasing signs the U.S. economy is stabilising, but a full-fledged recovery from the coronavirus outbreak is still distant.

Some analysts are playing down the chance the Fed will adopt yield curve control to guide 10-year Treasury yields lower, but uncertainty about the outcome of the Fed meeting could keep the dollar under pressure.

"The Fed can afford to wait and see on yield curve control because the U.S. economy has gotten past the crisis phase and only just entered the healing phase," said Masafumi Yamamoto, chief currency strategist at Mizuho Securities in Tokyo.

"The markets got overly optimistic and are adjusting lower, but this is a good chance to buy the dollar on the dip."

Editor: Anna Suci Perwitasari