Yesterday the euro rose against the dollar to its highest level in four months, after a German court allowed ratify the ESM, increasing the demand for the single currency.

Euro continued its two-day rise against the yen, after the Constitutional Court of Germany has introduced certain conditions. It ruled that the German contribution to the ESM should not exceed 190 billion euros, and more - with the consent of the Bundestag lower house.

The dollar fell against most of its 16 major counterparts as the focus of traders focused on the outcome of the two-day meeting of the U.S. Federal Reserve, which will be announced.

The Australian dollar rose to a three-week high against the dollar on speculation that the Fed may announce the stimulus and after Premier Wen Jiabao said that China will resort to economic stimulus.

The British pound fell against the dollar after a report showed that the unemployment rate in the UK rose unexpectedly in July to a level of 8.1% from 8.0% in June.

The dollar index (DXY), which is used to track the value of the dollar against six major currencies, fell 0.2 percent to 79.722.