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The dollar fell on Tuesday, but is trading in a narrow range, as investors remain cautious ahead of inflation data due in the United States later in the day, coinciding with the start of the Federal Reserve’s two-day monetary policy meeting.
The Consumer Price Index report issued by the US Labor Department is expected to show that inflation eased slightly in May, leaving an outlet for the US central bank to stop raising interest rates during this meeting.
The outlook boosted risk appetite, keeping the dollar near multi-week lows against the risk-sensitive AUD/USD and USD/NZD.
The Australian dollar last traded at $0.6753, after hitting a one-month high of $0.6774 in the previous session.
The New Zealand dollar settled at $0.6123, staying close to Monday’s peak at $0.6153, the highest since May 24.
The British pound rose 0.07% to $1.2520, after climbing to a one-month high of $1.2600 on Monday on hawkish comments by Bank of England policymakers.
The euro rose 0.04% to $1.0760, with traders also focusing on the European Central Bank’s rate decision on Thursday.
The dollar index recorded a slight increase to 103.59, after falling to 103.24 yesterday, the lowest level since May 23.
