The dollar notched moderate gains on Monday but held close to a nine-month low against a basket of currencies, with most investors convinced the Fed will maintain its ultra-loose monetary policy when it meets this week and in the months ahead. The Federal Open Market Committee, the Fed's policy-making arm, is unlikely to make any shift to policy at its two-day meeting that opens on Tuesday, as the Fed awaits more evidence of how great an impact Washington's budget battle had on the US economy.
Many economists believe the Fed could stand pat for the rest of the year, and most expect the US central bank will not begin reducing its $85 billion per month bond-buying program until March 2014. The dollar index, which tracks the greenback against a basket of six major currencies, rose for a second straight session. The index last traded 0.2 percent higher at 79.358 after earlier falling to 79.154, close to the near nine-month low of 78.998 touched on Friday.
The euro traded down 0.2 percent at $1.3784, having risen to $1.3832 on Friday, which marked its highest level since November 2011, according to Reuters data. The dollar rose 0.3 percent to 97.74 yen, above a more than two-week low of 96.92 yen hit on Friday, according to Reuters data.
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