NZ dollar little changed in tight range ahead of Fed

The euro, which on Monday hit a five-week high above $1.07 on the expectation that the European Central Bank is moving towards winding back its stimulus programme, inched down to $1.0644, with dovish comments from ECB officials adding to a cautious mood.

Tokyo ended 0.1 percent higher, recovering from early losses as a pick-up in the yen was offset by the Bank of Japan's upbeat assessment of the nation's economy.

While the Fed raised interest rates by 25 basis points on Wednesday, it kept to its original forecast of three rate hikes this year, disappointing investors who were expecting a bump up to four.

US long-dated and benchmark Treasury yields edged lower on Tuesday after a drop in oil prices was viewed as a deflationary sign, but the drop in yields was limited as investors awaited the Federal Reserve's policy statement on Wednesday.

The two-year swap rate was unchanged at 2.31 percent and the 10-year swaps were steady at 3.57 percent.

"The story in global markets over the past 24 hours has centred on a broad-based tightening of monetary policy conditions (and the perception of future tightening)", Chris Weston, chief market strategist at IG in Melbourne, wrote in a note.

The S&P 500 rose 0.8 percent to 2,385.26 Wednesday, and the Stoxx Europe 600 Index added 0.4 percent.

The Aussie was down 0.3 percent at $0.7687 following its overnight surge of 2 percent to a three-week high of $0.7720. The Labor Department said on Tuesday that its producer price index for final demand increased 0.3 percent last month after rising 0.6 percent in January. Hong Kong's Hang Seng index rode the positive regional trend, staying on track to log a 3.4 percent gain for the week, its biggest since September.

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MSCI's all-country world stock index gained 0.7 percent.

The euro climbed to a one-month high after an exit poll from the Dutch election showed Prime Minister Mark Rutte's Liberals easily beating the anti-Islam Freedom Party of Geert Wilders.

"There is not a lot for the (eurozone) region today.so any political news out of the Netherlands might be its main driver".

The Swiss National Bank will also announce its interest rate decision.

In commodities, oil prices rose slightly, supported by a weaker dollar.

US crude settled up 2.4 percent at $48.86 a barrel, after touching a three-month low a day earlier. It touched its lowest level in 3 1/2 months early this week on concerns about a supply glut in the US, but data on Wednesday showing a small decline in stockpiles there helped lift prices.

Sterling slipped as much as 0.9 percent to $1.2110, its lowest in eight weeks, as concerns increased over a second Scottish independence referendum and the triggering of Article 50, which will formally begin Brexit negotiations.

Spot gold was down 0.2 percent at $1,201.54 an ounce by 2:59 p.m. EST (1859 GMT), as investors took a wait-and-see approach ahead of the Fed meeting.

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