Dollar bounces as traders await Fed policy meeting

The dollar bounced on Wednesday amid speculation that the U.S. Federal Reserve will take steps to control the rise in bond yields at its policy meeting.

The dollar stood at 107.72 against the yen in Asian trade. It traded at 0.9512 on the Swiss franc.

Investors are focused on the Fed policy meeting next week due to the reports that the central bank will restrict bond yields. This came after the dollar rose amid signs of a stabilizing U.S. economy.

Analysts are downplaying the prospect that the Fed will adopt yield curve control, but market worries could put pressure on the dollar.

The pound hit a near-three-month high of $1.2732. The euro stood at $1.1340 and traded at 89.10 pence on the pound.

The 10-year Treasury yield was at 0.8270% on Wednesday. Long-term Treasury yields dropped and the yield curve flattened ahead of the Fed meeting.

The Australian dollar broke off from its eleven-month high and traded at $0.6958, while the New Zealand dollar sat at $0.6961.

In Asia, the yuan and the Korean won both gained on the dollar.