Investing.com - The dollar was steady close to recent highs against the euro and the yen on Tuesday as investors awaited the outcome of Wednesday’s Federal Reserve policy meeting.
EUR/USD dipped 0.07% to 1.2931, remaining supported above the 14-month low of 1.2858 reached one week ago.
The euro continued to trade in a narrow range after the European Central Bank cut rates to record lows across the euro zone to record lows earlier this month and unveiled new easing measures in a bid to shore up inflation in the euro area.
USD/JPY edged up 0.09% to 107.28, not far from Friday’s highs of 107.38, the most since September 2008.
Expectations that the Federal Reserve is growing closer to raising interest rates continued to boost the dollar against the yen and the euro, with the Japanese and European central banks likely to stick to a looser monetary policy stance.
The Fed was expected to cut its asset purchase program by another $10 billion on Wednesday, which would keep it on track for winding up the program in October, and to start raising interest rates sometime in mid-2015.
Data on Monday showed that U.S. industrial production unexpectedly fell 0.4% in August as motor vehicle output dropped sharply. However, on a year-over-year basis, factory output was up 4.6%, pointing to underlying strength in the sector.
A separate report showed that manufacturing activity in the New York region jumped to an almost five year high this month, underlining the view that the economic recovery is progressing steadily.
Elsewhere, the euro was little changed against the yen, with EUR/JPY last at 138.76.