The dollar rose against major currencies during Tuesday's trading, nearing its highest level in two weeks, as investors awaited the start of the Federal Reserve meeting to discuss monetary policy decisions, amid expectations of a 25-basis-point interest rate hike.
The dollar index, which measures the performance of the US currency against a basket of six major currencies, rose 0.20% to 99.60 points, supported by rising market expectations of a tightening of US monetary policy.
The Federal Reserve begins its two-day meeting amid widespread anticipation of its interest rate decision, as markets continue to reprice their expectations for the course of monetary policy, which is reflected in the movements of the dollar and global currency markets.
In the currency market, the yen weakened against the dollar after hitting a seven-month high of 152.89 yen to the dollar last week, despite market expectations that the Bank of Japan would raise interest rates at its meeting scheduled for Friday.
The euro fell 0.10% against the dollar to $1.1536, while the pound sterling fell 0.20% against the US currency to $1.3472.
Conversely, the dollar rose against the yen by 0.55% to 155.18 yen, while the dollar remained stable against the Swiss franc at 0.8172 francs.
The currency market movements come at a time when investors are focused on the decisions of major central banks, most notably the Federal Reserve and the Bank of Japan, due to their direct impact on interest rate differentials, capital flows, and the movement of major currencies.
