The US dollar was little changed on Tuesday, with traders cautious ahead of the Federal Reserve's latest interest rate-setting meeting and ahead of consumer confidence and JOLTs jobs data due later in the day.

At 14:30 Riyadh time, the dollar index, which measures the US currency against a basket of six other currencies, was trading flat with a slight rise at 104.35, moving in a narrow range.

Dollar Calm Ahead of Fed Meeting

The U.S. Federal Reserve begins its two-day policy-setting meeting later Tuesday and is expected to keep interest rates unchanged when it concludes its meeting the following day.

The U.S. central bank is widely expected to keep interest rates unchanged this week, but traders will be looking for any hints from Fed Chairman Jerome Powell about how far policymakers are willing to go to cut rates at his press conference.

Weak inflation readings and dovish comments from Fed officials have increased bets in markets that September will be the starting point for a 25 basis point cut.

Powell also has the Jackson Hole central bankers' meeting in August, in the absence of the Fed meeting that month, to further guide the market, but the failure to give a clear signal of a September cut this week is likely to boost Treasury yields and the dollar.

Sterling falls on Bank of England uncertainty

In Europe, the pound was trading marginally lower against the dollar at 1.2857, ahead of Thursday's Bank of England meeting.

There is a great deal of uncertainty surrounding this meeting, with key policymakers not speaking publicly for more than two months due to rules in the run-up to the general election at the beginning of this month.

Policymakers will have to judge between higher-than-expected service price inflation and weak growth, with the latter remaining the marginal preference as it stands.

The euro rose 0.1% to 1.0829, after some mixed growth data from the euro zone.

The French economy grew marginally faster than expected in the second quarter, rising by 0.3% in the three months to the end of June.

Yen regains some gains

In Asia, USD/JPY rose 0.5% to 154.78, with the yen giving up some recent gains ahead of Wednesday's Bank of Japan meeting.

Analysts appear divided on whether the central bank will keep interest rates unchanged or agree to raise them by 10-15 basis points.

But aside from interest rates, the Bank of Japan is widely expected to deliver hawkish signals by signaling an end to its quantitative easing policy. The central bank said at its June meeting that it would outline plans to gradually end its asset-buying programs in July.

USD/CNY The US dollar fell 0.1% to 7.2496, remaining close to an eight-month high amid continued concerns over slowing economic growth in the country.

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