Investing.com - The dollar moved lower against the euro and the yen on Tuesday amid growing expectations that the greenback could weaken in the wake of the Federal Reserve’s policy meeting later this week.
EUR/USD hit highs of 1.1060, the most since October 30 and was last at 1.1049, up 0.52%.
The yen also gained, with USD/JPY down 0.3% to 120.66, not far from Monday’s six-week lows of 120.33.
The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was at 97.32, off 0.44% for the day.
Most investors expect the U.S. central bank to raise interest rates for the first time since June 2006 at its upcoming meeting on Wednesday.
Higher interest rates would make the dollar more attractive to yield-seeking investors in the long run, but a rate hike could also trigger dollar selling in the immediate aftermath.
With a rate hike priced in investors are now focusing on how quickly the Fed will tighten monetary policy in 2016. The Fed has indicated that the pace of rate hikes will be gradual.
Elsewhere, the pound was little changed, with GBP/USD at 1.5141, while the Swiss franc climbed against the greenback, with USD/CHF down 0.47% to 0.9804.