US dollar falls against euro, yen, as policy makers meet

[WASHINGTON] The US dollar dropped slightly against the euro and the yen on Tuesday, as policy makers in Washington and Tokyo prepared to release decisions on interest rates.

At 2100 GMT, the euro bought US$1.0986, down from US$1.0993 on late Monday despite having gained in early trading.

The European currency dropped markedly against the yen, fetching 114.96 yen versus 116.32 yen the day before. The dollar also weakened against the yen, falling to 104.62 from 105.82.

The US Federal Reserve is expected not to raise interest rates when a two-day meeting on monetary policy lets out on Wednesday afternoon.

Japanese officials are also considering fiscal and monetary stimulus measures, with the Bank of Japan due to meet on Friday.

"Some of the world's largest yen traders believe the yen will strengthen regardless of the rate decision. And I agree," said Stephen Simonis, chief currency consultant for FXDD Global.

The dollar-yen rate "could get below 100 before stabilising around the 98.50 area," he said.

AFP