Asian session review: the US dollar consolidated against major currencies

During today's Asian trading, the US dollar was trading steady against major currencies after posting its biggest weekly gain in more than a month as traders closed short positions ahead of the Federal Reserve meeting.

The ICE index, which tracks the dollar's performance against six currencies (euro, swiss franc, yen, canadian dollar, pound sterling and swedish krona), fell 0.01%.

The dollar's direction in recent weeks has been driven by fluctuating bets on whether inflationary pressures from the economy's reopening could force the FOMC to cut its stimulus earlier.

Policymakers ' comments that inflation would be transitory helped calm that concern, but now markets are waiting for more clues from the Fed about the timing of an exit from ultra-easy policy.

Caution ahead of the Fed meeting has pushed a Deutsche Bank gauge of implied currency-market volatility to the lowest since February of last year, dropping around 10% since the start of the month.

"While we acknowledge the uncertainty around tapering given the recent noise in data, we think that risks for USD ... remain somewhat asymmetric and skewed to the upside, though the pace of appreciation will likely be somewhat contingent on near-term Fed rhetoric," Morgan Stanley analysts said.