Asian shares were mixed on Wednesday while the dollar dithered as markets waited anxiously for the Federal Reserve to provide guidance on the risk of US rate hikes this year.
While no move is expected at this meeting it does include updates of Fed members' economic projections and a news conference with Chair Janet Yellen, events that have caused violent market reactions in the past.
"There's no question that the FOMC is expected to provide the much-needed clarity global markets need in order to move forward with some sense of conviction," said Stefan Worrall, director of Japan equity sales at Credit Suisse.
"Ahead of that, we're seeing a very pregnant pause and an air pocket of conviction."
MSCI's broadest index of Asia-Pacific shares outside Japan was left all but flat, while South Korean stocks edged up 0.2 per cent.
Japan's Nikkei took a knock from a firmer yen and slipped 0.4 per cent, while Shanghai added 0.2 per cent.
Oil prices did manage a bounce after data from industry group American Petroleum Institute (API) showed U.S. crude stockpiles rose by less than half what analysts expected.
U.S. crude gained 59 cents to $36.93 a barrel, while Brent rose 47 cents to $39.21.
There was little movement on Wall Street where the Dow ended up 0.13 per cent, while the S&P 500 lost 0.18 per cent and the Nasdaq dropped 0.45 per cent.
Join the dots
Hurting sentiment were downward revisions to retail sales that left consumer spending looking a lot softer so far this year. One result was that the Atlanta Fed "GDPNow" measure of economic growth dropped to 1.9 per cent for the first quarter, from 2.2 per cent.
The disappointing data only heightened the stakes for the Federal Open Market COmmittee (FOMC) meeting.
Analysts generally assume Fed projections for interest rates - widely known as the "dots" - will indicate only three hikes are likely this year instead of four. Yet the market is pricing in just one move of 25 basis points for 2016.
"It may seem dovish but the dots will have to come down by more than this, especially the 2016 dot, to be seen as genuinely bullish," said Alan Ruskin, global head of forex research at Deutsche.
"The market has less tightening priced in for the end of 2018 than the December FOMC median dot for the end of 2016."
This leaves equity and bond markets vulnerable to any hint of hawkishness from the Fed, say if Yellen made it clear that hikes were still possible at the April and June meetings.
In contrast, the U.S. dollar would likely benefit from the chance of higher rates.
It could do with the help having recently touched a one-month low against a basket of major currencies. The dollar index was stuck at 96.741 on Wednesday, while the euro marked time at $1.1103.
Both the greenback and euro nursed losses on the yen, which tends to gain at times of risk aversion. The dollar fetched 113.37 yen, while the euro bought 125.81 yen following a fall of 0.5 per cent on Tuesday.