Investing.com - The dollar was steady against a basket of the other major currencies on Tuesday ahead of a two-day meeting of the Federal Reserve where it is widely expected to raise interest rates for the fifth time since 2015.
The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was at 94.00 by 09:04 AM ET (14:04 GMT), holding just below Friday’s two-week high of 94.08.
The Fed is widely expected to raise interest rates for the third time this year at its meeting that will end on Wednesday and is currently seen tightening two to three times next year.
Concerns over tepid inflation have raised concerns over the outlook for further policy tightening in 2018, but data on Tuesday showed that U.S. producer prices jumped 3.1% from a year earlier in November as gasoline prices surged.
It was the largest increase since January 2012 and indicated that a period of softer inflation may have run its course.
The dollar was little changed against the yen, with USD/JPY edging down 0.06% to 113.49 after rising as high as 113.68 on Monday, the highest level in a month.
The euro was lower, with EUR/USD down 0.23% to 1.1742.
Sterling was steady, with GBP/USD last changing hands at 1.3342 after rising to the day’s high of 1.3380 earlier after data showing UK inflation unexpectedly nearly hit a six-year high in November with markets focusing on Brexit negotiations.
The Bank of England and the European Central Bank are to meet later in the week and are expected to hold rates steady.
Meanwhile, the New Zealand dollar was near one-month highs, building on strong gains from the previous session, with NZD/USD rising 0.5% to 0.6947.
Demand for the kiwi continued to be underpinned after the government appointed Adrian Orr as the new governor for the Reserve Bank of New Zealand for a five-year term, starting March 2018.
Orr, a former central banker, is seen a safe pair of hands who can likely avoid a radical shake-up of monetary policy.