NEW YORK: 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.
Analysts widely anticipate Fed policymakers to announce a lowering of monthly bond purchases starting in October when their two-day meeting ends on Wednesday. They expect Fed officials would leave the door open for a rate increase at their Dec. 12-13 meeting.
At 11:33 a.m. (1520 GMT), the index that tracks the dollar against six currencies was down 0.1 percent at 91.928, which was not far from the over 2-1/2 year low set on Sept. 8.
The dollar had weakened against yen ahead of US President Donald Trump's speech before the United Nations General Assembly, which some traders feared would heighten tensions between Washington and North Korea over the latter's growing nuclear weapons program.
While Trump dealt harsh criticism against the North Korean regime, it was not enough to spook most investors.
The greenback was steady at 111.57 yen, below its eight-week peak of 111.87 set earlier Tuesday.
Meanwhile, traders have been speculating whether the European Central Bank is moving closer to wind down its 2.3 trillion euro asset purchase program.
ECB policymakers disagree whether to determine a fixed date to end the program when they meet in October, as the euro has jumped, Reuters reported.
The single currency fell briefly on the Reuters report.
Earlier Tuesday, the yen hit a 21-month trough versus the euro, while the Swiss franc hit its lowest level against it since January 2015.
The common currency reached a one-week high versus the greenback at $1.2005.
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