Dollar Ticks Down As Traders Await Possible Move On FED Bond Purchases

The dollar weakened against a basket of currencies on Tuesday in advance of a Federal Reserve meeting where policymakers are expected to decide on the reduction of the central bank's $4.2 trillion worth of bond holdings.

The Fed's possible move to further roll back stimulus has not stemmed the greenback's weakness this year as other major central banks are considering steps to either slow their bond purchases or raise interest rates.

The index that tracks the dollar against six currencies was down 0.3 percent at 91.780, which was not far from the over 2-1/2 year low of 91.011 set on Sept. 8. U.S. currency was steady on the day against its Japanese counterpart at 111.56 yen, moving back toward an eight-week peak of 111.88 yen scaled overnight.

The euro was also steady on the day, at 1.1990 and GBPUSD with its choppy moves closed flat forming doji candle formation on daily charts. The local unit opened at 64.1950 against previous close of 64.08. The unit succumbed to the dollar bulls thereby closing at 64.3350. We expect the pair to trade in the range of 64.10.-64.35 for the day.

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