* Dollar has been buoyed as cautious investors close shorts
* Currency market volatility wallows at 16-month low
* Traders watching for clues on timing of Fed tapering
By Kevin Buckland
TOKYO, June 15 (Reuters) - The dollar hovered below a
one-month high compared with major peers on Tuesday ahead of a
much-anticipated Federal Reserve meeting that could signal a
change in the outlook for U.S. monetary policy.
The U.S. currency has been buoyed as traders closed short
positions before the Fed's two-day policy-setting confab, which
kicks off on Tuesday.
The dollar index, which measures the greenback
against a basket of six currencies, was flat early in Asia at
90.517. It has pushed briefly above 90.60 in each of the last
two sessions, and 90.63 would be the strongest level since May
Traders will be watching carefully for clues on when
policymakers will start tapering dollar-depreciating stimulus.
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