The dollar clung onto modest overnight gains early in Asia on Tuesday, but stayed near a nine-month trough as investors bet the Federal Reserve will this week set the course for its massive stimulus program to be maintained into early next year.
The dollar index was steady at 79.344 after drifting up 0.2 percent on Monday. However, it remained not far off Friday’s 78.998 – a low not seen since Feb. 1.
A break there could pave the way for a test of this year’s trough of 78.918 and then the September 2012 low of 78.601. Traders said the market lacked conviction and moves were driven more by flows and position adjustments ahead of the Fed policy meeting over Tuesday and Wednesday rather than by fundamentals.
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