LONDON — The dollar fell against the euro and yen on Monday as investors waited for the outcome of this week's US Federal Reserve policy meeting, analysts said.
In morning London trade, the European single currency rose to 1.3096 dollars from 1.3046 dollars late on Friday in New York.
Against the Japanese currency, the dollar dipped to 85.63 yen from 85.81 yen on Friday. Markets in Japan are closed for a public holiday and will re-open on Tuesday.
Analysts expect the US Federal Reserve to keep interest rates at historic lows when it meets Tuesday but they will be closely following its assessment of the world's biggest economy for hints of any possible policy changes.
The Fed is to expected anchor the fragile recovery by promising to leave interest rates at historic lows and keep stimulus spending at current levels.
"As the (Fed) meeting is approaching, it is mainly fears about further quantitative easing of the Fed's monetary policy -- in other words Fed purchases of US government bonds -- that is putting pressure on the greenback," said Commerzbank analyst Ulrich Leuchtmann.
Members of the Fed's policymaking panel will gather for the last time before November's mid-term elections, with the economic outlook brighter since their last meeting.
The US economy, after months of languishing in the doldrums, has regained some momentum since the Fed meet at the end of June, when members expressed concern about a "sluggish" economic recovery.
At recent meetings, Fed members have tussled over how and when to restart even modest crisis measures, which some fear would send the wrong signal to financial markets and forestall a return to normal monetary policy.
"In the end, it is the (Fed) statement that matters in indicating how much larger the Fed assesses the downside risks to US growth prospects," analysts from Singapore's DBS bank said in a market report.
In London on Monday, the euro changed hands at 1.3096 dollars against 1.3046 dollars late in New York on Friday, at 112.15 yen (111.93), 0.8399 pounds (0.8344) and 1.3157 Swiss francs (1.3170).
The dollar stood at 85.63 yen (85.81) and 1.0047 Swiss francs (1.0096).
The pound was at 1.5589 dollars (1.5628).
On the London Bullion Market, the price of gold rose to 1,280.70 dollars an ounce from 1,274 dollars an ounce late on Friday, when the precious metal struck a record high at 1,283.38 dollars.
