Dollar pares initial losses and ends mixed ahead of FOMC

The greenback pared intra-day losses made in Asia and European morning and ended Tuesday mixed on short-covering in New York ahead of the Federal Reserve monetary policy meeting on Wednesday. Rebound in the U.S. Treasury yields and rise in U.S. equities also contributed to usd's strength.  
  
Reuters reported U.S. House of Representatives Speaker Nancy Pelosi said on Tuesday that lawmakers are committed to reaching a deal on sending economic aid to those hurt by the coronavirus pandemic, despite the failure of Republicans and Democrats to find a compromise for many weeks.  
  
Versus the Japanese yen, although dollar retreated from 105.74 in Australia to 105.61 in Asia, price rebounded to 105.81 in Europe. However, renewed selling interest emerged and knocked price down to a 2-week low of 105.31 in New York morning due to cross-buying in jpy before recovering to 105.54.  
  
Although the single currency briefly dipped to 1.1860 at Asian open, price found renewed buying and rallied to 1.1899 on usd's weakness before retreating to 1.1876 in European morning but only to rise again to session highs at 1.1900. However, the pair then erased intra-day gains and tumbled to 1.1840 in New York on broad-based buying in the greenback.  
  
The British pound initially fell to session lows at 1.2816 in Asian morning on continued no-deal Brexit concern after UK government won first parliamentary vote on Prime Minister Boris Johnson's Internal Market Bill. However, cable erased intra-day losses and rallied to 1.2879 at European open on better-than-expected UK jobs data. Despite retreating to 1.2845, the pair then rose to session highs at 1.2927 (Reuters) due to broad-based selling in the greenback before weakening in tandem with euro to 1.2842 in New York on profit-taking and active buying in usd. The pair then rebounded to 1.2905 and traded at 1.2889 near the close.  
  
Reuters reported Britain's government won a vote on Monday for legislation it acknowledges could breach parts of a divorce agreement with the European Union, meaning the Internal Market bill now faces four days of parliamentary debate.     The government won by 340 to 263 votes. The bill now goes to the committee stage, with the most contentious day due in just over a week when lawmakers will debate on whether parliament should approve the implementation of the most disputed parts of the bill.   While a fall in the number of people in UK employment was less severe than expected at 12,000, compared with a median forecast for a fall of 125,000 in the Reuters poll.   
  
Data to be released on Wednesday :  
  
New Zealand current account, Japan exports, imports, trade balance, Australia Westpac leading index, UK core CPI, CPI, RPI, core RPI, PPI input prices, PPI output prices, core PPI output prices, DCLG house price index, EU trade balance, U.S. MBA mortgage applications, retail sales ex-autos, retail sales, business inventories, NAHB housing market index, Fed interest rate decision, and Canada CPI, BoC core CPI, core CPI.