Dollar on tenterhooks

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TOKYO: The dollar eased on Wednesday with investors looking past an expected U.S. rate hike later in the day for clues on Federal Reserve policy for the rest of the year.

The dollar index, which tracks the greenback against a basket of six major rivals, edged down 0.1 percent to 96.930 . Against the yen, the dollar inched 0.1 percent lower to 109.98, while the euro added 0.1 percent to $1.1217 .

The Fed is scheduled to announce its monetary policy decision at 2 p.m. eastern time (1800 GMT) on Wednesday at the end of a two-day policy meeting, followed by a press conference by U.S. Federal Reserve Chair Janet Yellen.

The Fed may also provide more clues on how it plans to reduce its holdings of more than $4 trillion in Treasuries and mortgage-backed securities. Economists polled by Reuters overwhelmingly see the U.S. central bank hiking its benchmark rate to a target range of 1.00 to 1.25 percent this week, though expectations for further rate increases are fading.

What emerges from the Fed meeting "is certainly going to chart the course for a lot, including the strength of the dollar," said Bill Northey, chief investment officer at the private client group of U.S. Bank in Helena, Montana, who spoke from Minneapolis.