The U.S. dollar traded lower against the most major currencies ahead Fed's monetary policy meeting. The U.S. currency remained under pressure after yesterday's comments by Minneapolis Fed President Narayana Kocherlakota. He said that inflation in the U.S. was more likely to be under Fed's 2% target until 2018. That may mean that interest rate in the U.S. will remain at the low level for a longer period.

Market participants are awaiting the release of the last Fed's monetary policy meeting today. They will be looking for any signs of the recovery of the world's largest economy. There are speculations that stronger employment data may lead to interest rate hike by the Fed.

The euro increased against the U.S. dollar in the absence of any major economic reports in the Eurozone.

The British pound traded higher against the U.S. dollar. The Halifax house price index declined 0.6% in June, missing expectations for a 0.3% fall, after a 3.9% rise in May.

On a yearly basis, the Halifax house price index rose 8.8% in June, after a 8.7% gain in May.

The Canadian dollar rose against the U.S. dollar due to the better-than-expected housing starts in Canada. The number of housing starts in Canada increased to 198,200 units in June, beating expectations for a decline to 191,000 units, after 197,000 units in May. May's figure was revised down from 198,300 units.

The New Zealand dollar traded near 3-year highs against the U.S dollar due to decreasing demand for the U.S. currency ahead of Fed's meeting minutes. The kiwi was also supported by Fitch's decision. The ratings agency affirmed the New Zealand's AA rating yesterday and raised New Zealand's outlook to positive from stable.

The Australian dollar traded mixed against the U.S. dollar after the better-than-expected consumer confidence in Australia. The Westpac Banking Corporation released its consumer confidence index for Australia. The index increased 1.9% in July, after a 0.2% gain in June.

The Japanese yen traded lower against the U.S. dollar. The machine tool orders in Japan climbed 34.2% in June, after a 24.1% gain in May.