The dollar wavered Tuesday, giving back some of its strong recent gains against European rivals ahead of a crucial monetary policy announcement from the Federal Reserve.
The Fed is expected to end a two-day meeting tomorrow with a vote to further trim its quantitative easing program while keeping interest rates near zero.
Traders will be looking for clues on the outlook for interest rates in the Fed’s accompanying statement.
The Fed has indicated it plans to hold interest rates near zero well into next year, but an improving jobs market and signs of inflation could prompt rate hikes earlier in 2015.
With markets growing a bit skeptical that the Fed will offer much clarity, the dollar eased to $1.30 versus the euro, down above 2 cents from last week’s 14-month peak near $1.28.
The dollar also turned lower against the sterling, slipping to $1.63 from a 10-month peak near $1.61.
On Thursday, Scotland will vote on whether to become independent from the United Kingdom. The latest polls suggest that Scottish voters are leaning towards sticking with the U.K.
The dollar was little changed against the yen today, holding near a 6-year peak above Y107.
In economic news from the U.S., the Labor Department said its producer price index was unchanged in August after inching up by 0.1 percent in July. The unchanged reading came in line with economist estimates.
Excluding decreases in food and energy prices, core producer prices ticked up by 0.1 percent in August after edging up by 0.2 percent in the previous month. The modest increase also matched estimates. The report also showed that producer prices and core producer prices both increased by annual rates of 1.8 percent in August.