Hot Now: Dollar slips

SINGAPORE: The dollar surrendered short-lived gains on Tuesday as concerns about the U.S. economy and politics returned to the fore ahead of a Federal Reserve meeting, while a lack of catalysts kept Asian stocks subdued.

European stocks look set for a stronger open, with financial spreadbetter CMC Markets expecting Britain´s FTSE 100 Germany´s DAX and France´s CAC 40 to all open about 0.3 percent higher.

The dollar earlier rose on expectations the Fed will signal at a meeting starting later on Tuesday its readiness to begin reducing its bond portfolio at its September meeting. Also lifting the dollar earlier were strong July manufacturing and services purchasing managers´ surveys (PMIs).

But then it fell back as investors feared that the surveys would not shake the Fed´s cautious approach to monetary policy tightening.

"Those who dared go long the dollar probably didn´t see the current conditions as worthy of holding on for too long," said Matt Simpson, senior market analyst at ThinkMarkets in Melbourne.

"Moreover, as technicals, sentiment and fundamentals point lower for the dollar, the expectation of a dull Fed meeting only adds to the reasons to not ‘bottom pick’ the dollar.