U.S. Dollar Slides Ahead Of Fed Meeting

The U.S. dollar drifted lower against its most major opponents in the European session on Monday, ahead of the Federal Reserve's policy meeting due this week, with some investors expecting the policymakers to lower their interest rate forecasts for this year.

The Fed announces its decision on Wednesday, with economists widely expecting it to keep rates unchanged.

The benchmark interest rate is presently in a range of 2.25 to 2.5 percent.

Market participants await the Fed statement for more indications about outlook for interest rates.

There is speculation that Fed policymakers could cut their interest rate forecasts, or "dot plots", indicating a few or no further hikes this year.

With U.S. economic indicators showing weakness recently, traders are pricing the case for the Fed to maintain its patient stance on further rate hikes this year.

The currency traded mixed against its major counterparts in the Asian session. While it rose against the pound and the yen, it held steady against the franc. Against the yen, it rose.

The greenback reversed from an early high of 111.63 against the yen, falling to 111.44. If the greenback slides further, 110.00 is likely seen as its next support level.

Final data from the Ministry of Economy, Trade and Industry showed that Japan's industrial production in January declined less than estimated earlier.

Industrial production fell a seasonally adjusted 3.4 percent month-on-month in January, following a 3.7 percent decline estimated earlier.

The U.S. dipped to a 2-week low of 1.1359 against the euro and near a 2-week low of 0.9997 against the franc, off its early highs of 1.1319 and 1.0025, respectively. The next key support for the greenback is seen around 1.15 against the euro and 0.98 against the franc.

Reversing from its early high of 1.3347 against the loonie, the greenback edged down to 1.3302. The greenback is poised to find support around the 1.30 area.

On the flip side, the greenback rebounded to 0.7095 against the aussie and 0.6859 against the kiwi, from its early near 3-week lows of 0.7120 and 0.6874, respectively. On the upside, 0.68 and 0.67 are possibly seen as its next resistance levels against the aussie and the kiwi, respectively.

The greenback appreciated to 1.3221 against the pound, from a low of 1.3300 hit at 7:30 pm ET. The greenback is seen finding resistance around the 1.31 level.

The U.S. NAHB housing market index for March is scheduled for release shortly.