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US dollar rises ahead of Fed announcement

IANS | New York |

The US dollar index on Tuesday increased against other major currencies in late trading as investors expect the Federal Reserve meeting to pave the way for a US rate hike this year.

In late New York trading, the euro fell to $1.1996 from $1.2081 in the previous session, and the British pound was down to $1.3618 from $1.3749 in the previous session, Xinhua news agency reported.

The Australian dollar fell to $0.7491 from $0.7529.

The US dollar bought 109.80 Japanese yen, higher than 109.29 Japanese yen of the previous session. The US dollar increased to 0.9964 Swiss franc from 0.9907 Swiss franc, and it was up to 1.2848 Canadian dollars from 1.2841 Canadian dollars.

The US Federal Reserve’s two-day meeting kicked off on Tuesday.

Analysts expected the central bank to keep rates on hold when it concludes on Wednesday, but the rate setters could signal the hike in June or hint at the prospect of a more aggressive schedule of rate increases this year.

On the economic front, the US manufacturing expanded in April with its Purchase Management Index (PMI) registered 57.3 per cent, according to a report released on Tuesday by the Institute for Supply Management (ISM).

The dollar index, which measures the greenback against six major peers, rose 0.66 percent at 92.451 in late trading.