Asian session: Dollar slides before Fed meeting on easing speculation

The dollar slid against the euro and yen before the Federal Reserve begins a meeting today amid prospects policy makers will consider further monetary easing steps to sustain the U.S. economy.

Fed policy makers will bring new forecasts to their two-day meeting starting today and probably will mark down their April central tendency estimate for growth of 2.4 percent to 2.9 percent this year. They will also contend with continuing financial stress in Europe and a U.S. unemployment rate that has remained above 8 percent for 40 consecutive months.

The Japanese currency gained versus most of its 16 major counterparts as Group of 20 leaders meet in Mexico for a second day to discuss Europe’s debt crisis that has spurred investor demand for refuge assets. Spain’s borrowing costs soared to a euro-era record yesterday before the nation sells bills today.

G-20 leaders are in Los Cabos, Mexico for a second consecutive summit to be dominated by Europe’s debt woes. With Greek elections over the weekend failing to damp the threat of contagion, policy makers are discussing ways to stimulate the world economy if necessary, a Canadian official said.

The International Monetary Fund has commitments for $456 billion to be used as a “second line of defense” to resolve and prevent financial crises, according to Managing Director Christine Lagarde, which she said almost doubles the fund’s lending capacity. Lagarde made the announcement in an e-mailed statement during the G-20 summit.

EUR/USD: during the Asian session the pair rose to $1.2615.

GBP/USD: during the Asian session the pair traded at range of $1.5660-$1.5695.

USD/JPY: during the Asian session the pair fell to Y78.89.