In morning European trading, the euro bought US$1.2960, compared with US$1.2956 late Monday in New York.
The British pound rose to US$1.9675 from US$1.9595, while the dollar fell to 121.92 Japanese yen from 121.94 yen.
The Federal Reserve is set to begin a two-day meeting later Tuesday to decide whether to adjust its key interest rate.
Higher interest rates support a currency by making some assets denominated in that currency more attractive to investors.
Analysts speculated that the Fed would keep rates unchanged again and that markets would be looking to the language used by the bank's members for clues as to what might be to come in the future, reports AP.
"Clearly there's some doubt creeping into the market as to whether or not the outlook for U.S. interest rates remains quite as robust as has been discussed of late," said David Jones, chief markets analyst to CMC Markets in London. "Essentially any suggestion that a quarter point will come off in the next few months does seem to be being accounted for right now, so there's certainly the possibility of a reversion after tomorrow's verdict."
The central bank has kept rates unchanged at 5.25 percent for the past four meetings after a string of hikes that lifted the dollar.
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