FX round-up: Carry currencies gain in otherwise calm market ahead of Yellen

Foreign exchange markets were very calm ahead of a speech from Fed Chair Janet Yellen scheduled for just a little afterwards in the afternoon.

As of 16:55GMT euro/dollar was edging higher by 0.03% to 1.1199.

Cable was up by 0.18% to 1.4280 and dollar/yen drifting lower by 0.12% to 113.31.

Ahead of Yellen´s remarks, sterling shrugged of a decision by the Bank of England´s Financial Policy Committee to hike UK lenders´ counter-cyclical capital buffers to 0.5% from 0.0% by the end of March 2017.

By some estimates, that would force British banks to hold an extra 5bn pounds in total as buffers, with the the impact on the country´s largest lenders expected to be offset by a reduction in other requirements.

"The relatively timid measures announced by the Bank of England’s Financial Policy Committee (FPC) today underlined that it is set to tread cautiously when implementing macroprudential policy. Accordingly, we doubt that the FPC’s actions will knock the economic recovery off course," analysts at Capital Economics said in a research note sent to clients.

New Zealand´s dollar was the exception to the placid trading conditions in foreign exchange markets on Tuesday, rising by 1.18% to 0.6803.

The greenback was also on the backfoot against the Aussie, as the Australian unit is known in FX markets, with the latter gaining 0.35% to 0.7570.

To take note of, as of Tuesday afternoon traders were placing a probability of an interest rate hike by the Fed at its June meeting at just 33.0%, down from the 46.0% estimated a week ago, according to Bloomberg data.

Figures from the US government published on 28 March revealed that personal expendituers and income unexpectedly fell in February, with a measure of inflation, the so-called PCE deflator advancing just 0.1% month-on-month, leaving the year-on-year rate of change at 1.7% - versus the 1.7% forecast by Capital Economics for the final quarter of the year.