The dollar gave back some of its recent gains against the euro, falling to 1.3166 while dropping to 95.61 versus the yen. The FOMC kicked off its two-day monetary policy meeting earlier and will be announcing the results Wednesday afternoon. With the Fed's benchmark lending rate already at zero, there is likely to be no change in interest rates. The key focus will be whether the FOMC will continue to ease policy through alternative measures. The policy statement will also be closely scrutinized.

US equities clawed back into positive territory following a surprise reading in the Conference Board's survey of consumer confidence, which sharply beat expectations in April at 39.2 from a revised reading of 26.9 a month earlier. The bounce in consumer confidence marked its strongest reading since November 2008. The February Case-Shiller home price index declined by 2.2% on a monthly basis versus a 2.8% drop in the previous month, while declining by 18.63% compared with a revised 19% drop a year earlier. Also released was the April Richmond Fed manufacturing index posted a -9.0 reading compared with -20 in the previous month.

The economic calendar for Wednesday will see Q1 GDP and PCE. On an annualized basis, the economy is estimated to contract by 5.0%, versus 6.3% previously. The personal consumption index is estimated to increase by 0.9% in the first quarter compared with a 4.3% decline, while the core PCE is estimated to increase by 1.5%versus 0.9%.

JPY Edges Higher

The yen advanced against the greenback, pushing up to 95.61 in the New York session. A barrage of Japanese data is due out in early Wednesday trading, consisting of March industrial production, housing starts and construction. The Bank of Japan will also announce the results of its policy deliberations. The BoJ is not expected to make any changes.

USDJPY hovers near 96.40, with support starting at 96, backed by 95.70 and 95.30. Subsequent floors are eyed at 95, followed by 94.60 and 94.20. On the upside, gains will emerge at 96.50, backed by 96.75 and 97.