Euro barely changed against U.S. dollar ahead of Fed meeting

The euro was barely changed against the U.S. dollar on Tuesday as markets awaited this week's decision on interest rates by the U.S. Federal Reserve.

The 13-nation euro bought US$1.3300 in afternoon European trading, compared with US$1.3301 in New York late Monday.

The dollar dropped to 117.19 Japanese yen from 117.59 yen. It also fell against the British pound, which rose to US$1.9583 from US$1.9443.

The Fed meets Tuesday and Wednesday and is widely expected to leave rates unchanged even though the economy has shown signs of slowing. Traders will examine the Fed's language for signals on whether rates might be headed lower.

The bank has kept rates unchanged in recent months after a string of increases. Higher interest rates, used to combat inflation, can help bolster a currency by making certain types of investments more attractive.

U.S. data released Tuesday showed that construction of new homes rebounding in February after a big decline the previous month - but building permits slid further. The figures did little to move currency markets.

The European Central Bank has been raising rates gradually as the Fed holds steady, reports AP.

Still, German data released Tuesday pointed to lower inflation pressures in Europe's biggest economy. The figures showed producer price inflation dropping to its lowest level in more than two years last month - an annual rate of 2.8 percent.