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Dollar stays softer

NEW YORK: The dollar was off at US midday in nervous trade as the policy-setting FOMC met in Washington.

US financial markets widely expect no change in monetary policy this meeting, and currency dealers said that outcome should have little effect on the dollar. But the potential for a surprise move kept players edgy.

The dollar was boosted against the mark in early trade by a report showing an unexpected contraction in German M3, which heightened expectations the Bundesbank would trim its repo rate on Wednesday.

At midday, the dollar was down to 1.4836/46 marks from 1.4862/67 marks at the open and to 96.60/70 yen versus 96.70/76 at the open.

Traders said there was steady selling of dollar/yen in the morning and Japanese exporters and options traders were selling above the 97 yen level.

In other trade, the dollar was at 1.2295/02 Swiss francs at midday, down from 1.2325/35 Swiss francs at the open and at Canadian $1.3574/79, little changed from $1.3575/80.-Reuter