Dollar holds near four-week high ahead of Fed rate decision

The dollar steadied near a four-week high on Tuesday as traders awaited the U.S. Federal Reserve's interest-rate decision, with expectations firming that the central bank will deliver another rate increase at its current meeting. The dollar index, which measures the U.S. currency against six peers, held around 101.50 after touching its strongest level since early July. The euro edged up 0.05% to $1.1370, while the dollar traded at 163.745 yen. The British pound rose 0.1% to $1.330. Money markets are pricing a 40% probability of a 25-basis-point rate hike at this meeting, up from 20% a week earlier. Expectations that rates will be higher by September 2026 have climbed to 95%. The Federal Reserve is due to conclude its policy meeting on Wednesday. Investors are also watching U.S. second-quarter GDP data and the core personal consumption expenditures price index, the Fed's preferred inflation gauge, due later in the week.