Dollar treads as central bank meetings loom

TOKYO (Reuters) – The bankruptcy of the dollar on Monday, as market participants awaited key central bank meetings this week, which was set for the near-term race for currencies.

Central banks in focus include the Bank of Japan, which ends on a two-day meeting on Tuesday, and the Federal Reserve, which concludes its policy meeting on Wednesday. The Bank of England also makes a policy decision on Thursday.

The dollar index against a basket of six major currencies. Upbeat second quarter U.S. gross domestic product data failed to lift the greenback, as markets had mostly priced in strong figures.

The U.S. currency was 0.05 percent lower at 110.970 JPY yen = 0.2 percent following on.

Masafumi Yamamoto, chief forex strategist at Mizuho Securities in Tokyo, said investors will be more interested in U.S.

"On the other hand, the two-year Treasury yield is rising, underscoring the market. This is limiting the dollar's losses, the movements are likely to be limited ahead of the BOJ meeting, "Yamamoto said.

The two-year Treasury yield US2YT = RR rose to a decade high of 2.69 towards the end of last week.

The financial markets are keen to see the BOJ is doing a great deal to make its massive stimulus program more sustainable.

The euro nudged up 0.05 percent to $ 1.1659 =, extending Friday's modest gains.

The pound was flat at $ 1.3110 GBP = D3.

Sterling posted its third straight weekly last week. It will be looking for some relief on Thursday, when the BoE is widely expected to loom up for the second time since the 2008 financial crisis.

The Australian dollar dipped 0.05 percent to $ 0.7398 AUD = D3, trimming some of its gains after rising roughly 0.4 percent on a broadly sagging dollar.