Dollar slips before Fed decision on interest rates

The dollar slipped Tuesday against key currencies before the Federal Reserve's expected mid-afternoon announcement on U.S. interest rates.

NEW YORK — The dollar slipped Tuesday against key currencies before the Federal Reserve’s expected mid-afternoon announcement on U.S. interest rates.

Meanwhile, fears about deficits in Greece subsided slightly after European finance ministers said they had a plan for financial aid for the debt-laden country if it was necessary. Details on the size and type of aid and when it could be available were not disclosed.

Greece’s heavy debt load has undermined the stability of the European monetary union and weighed on the euro this year.

The 16-nation euro rose to $1.3726 in morning trading in New York from $1.3672 late Monday. The British pound rose to $1.5135 from $1.5048, and the dollar edged down to 90.48 Japanese yen from 90.49 yen.

In the U.S., the Federal Reserve is meeting on whether to change interest rates, with an announcement expected in mid-afternoon. Analysts say the central bank is unlikely to change the key lending rate from its current range near zero, as the recovery from the recession remains weak. But the Fed could change its languange on how long it expects to keep rates very low.

Higher U.S. interest rates, or the expectation of higher rates, tends to boost the dollar’s value as traders transfer funds to assets priced in dollars in search of higher yields.

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