Mixed movements graced US dollar trading in the European session, as markets continued to take a cautious approach to the FOMC policy meeting.
Compared to a group of major currencies, the dollar index is seen trying to rise from its lowest level to trade around the price of 103.40.
Even so, the market continues to shy away from taking bigger positions amid uncertainty about the global banking crisis and the FOMC meeting.
In the European session, the euro showed gains at around 1.0730 against the greenback ahead of the release of German economic sentiment data from the ZEW survey.
In contrast to the euro, the pound currency recorded a decline after reaching a new 7-week high against the US dollar in the previous session.
Investors appear to be starting to be cautious ahead of the Bank of England (BOE) meeting on Thursday, but before that the market will be exposed first to Wednesday's UK inflation data.
In addition, the antipodean currency, the Aussie and New Zealand dollars also showed a dismal performance with a lower decline against the USD.
Most recently, Reserve Bank of Australia (RBA) meeting minutes indicate that the central bank will consider stopping interest rate hikes.
The market's current focus is on Canadian inflation data to be published in the New York session, showing the dollar loonie is currently trading steady against the USD.
