By Virginia Harrison, MarketWatch SYDNEY (MarketWatch) — Safe-haven currencies extended gains as global risk appetite further eroded during Asian trading hours Tuesday, with traders turning to the Federal Reserve policy decision later in the day. The U.S. dollar index DXY -0.50% , which measures the greenback’s performance against a basket of six rival currencies, fell to 74.614, from 74.689 in North American trade late Monday. The euro EURUSD +0.68% rose to $1.4244, from $1.4185 in North American trade late Monday. The greenback also lost ground against the Japanese yen USDJPY -0.33% , with the dollar buying ¥77.27, down from ¥77.61 in North American trade late Monday. The dollar’s decline came ahead of the U.S. Federal Open Market Committee (FOMC) meeting later Tuesday, where traders will be watching for any indications of a third round of quantitative easing, or so-called QE3. The U.S. central bank is widely expected to maintain its federal funds target range of between 0% and 0.25%. Read more on the FOMC meeting. The dollar fell against the safe-haven Swiss franc USDCHF +0.45% , buying 75.33 centimes, down from 75.47 centimes in North American trading late Tuesday. One hundred centimes equals one Swiss franc. By contrast, commodity-linked currencies weakened on the muted risk appetite. The Australian dollar AUDUSD +0.62% bought $1.0187, falling from $1.0241 in North American trade late Monday, with the Australian currency briefly dipping below parity with the U.S. unit during Tuesday trading. On Tuesday, data showed Chinese consumer prices accelerated further to 6.5% in July from 6.4% in the previous month, beating expectations and keeping alive the prospect that Beijing may maintain a restrictive monetary policy. Read more on China’s inflation figures Virginia Harrison is a MarketWatch reporter based in Sydney.

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