Dollar loses some ground before Fed meeting, while euro rises (Reuters) (16-03-2010)

LONDON, March 16 (Reuters) - The dollar pulled back a little on Tuesday as markets are expecting the U.S. Federal Reserve to keep rates unchanged, although there is some concern about a surprise move upward.

The policy-setting Federal Open Market Committee was expected to reiterate its vow to keep interest rates very low for an "extended period", with the market focused on the Fed's assessment of the economic outlook.

The U.S. central bank was also expected to confirm the completion of its purchases of mortgage-backed securities and agency debt by the end of the first quarter, but keep the option for further buying should conditions deteriorate.

The euro was up 0.3 percent at $1.3715. The single currency touched session highs against the dollar and yen after data showed German ZEW institute's economic sentiment index came in higher than expected. Concerns about an immediate meltdown over Greece's massive debt have eased as euro zone finance ministers on Monday agreed on a plan to help Greece if needed.

But with little known about the plan's details, underlying sentiment toward the euro remained cautious.

Against the yen, the dollar rose 0.2 percent to 90.68 yen, while the euro gained 0.5 percent to 124.37 yen.

Source: Reuters