Dollar declines as Fed policymakers meet

The dollar is dropping as U.S. Federal Reserve policymakers are meeting.

UBS analyst Chris Walker says that given the recent fears that the chance of a recession has increased, investor expectations have grown that there could be a significant policy announcement from the Fed. He says UBS economists don’t expect a big rescue effort, however.

The Fed has previously earmarked extra funds for buying up bonds, a strategy known as “quantitative easing.” That adds money to financial markets and keeps interest rates low to support lending. But it also tends to weigh on a currency.

In morning trading Tuesday in New York, the euro rose to $1.4250 from $1.4190. The dollar fell to 77.23 Japanese yen from 77.70 yen.