Summary Dollar strengthened against euro as investors braced for a US interest rate decision this week.
NEW YORK (AFP) - The dollar strengthened against the euro and the yen Tuesday as investors braced for a US interest rate decision this week that could be the first hike in nine years.
The Federal Open Market Committee, the Federal Reserve s policy arm, will cap a two-day meeting Thursday with the rate announcement.
Though the Fed has signaled it would raise its zero-level benchmark rate this year, given the concerns about China s slowdown and stocks plunge, markets are on tenterhooks about whether liftoff will come now or the Fed will stand pat.
An increase in the federal funds rate potentially could further boost the strong dollar.
Movements in the foreign exchange market are being led by technical considerations as investors position themselves ahead of the rate announcement, said Vassili Serebriakov of BNP Paribas.
Traders looked past some US economic data for August on Tuesday, including a modest rise in retail sales and a drop in industrial production.
"From the Federal Reserve s perspective, the data released Tuesday wouldn t sway its decision about raising rates later this week," said Ryan Sweet of Moody s Analytics.
