The dollar fell against 15 of its 16 most-traded currencies in anticipation of the two-day Federal Reserve meeting, which begins tomorrow, and one that is expected to be announced the purchase of bonds to stimulate the economy.

The U.S. currency fell to its lowest level in nearly four months against the euro after ratings agency Moody said it may downgrade the country's rating from Aaa to Aa1, if no measures are taken to reduce the level of U.S. debt.

The euro rose after after the German Constitutional Court has declared that it will not postpone the decision on the European Stability Mechanism, scheduled for Wednesday, denying rumors appeared on the market.

The dollar fell against the euro to its lowest level since May 14, and up to the lowest level since June 1 against the yen.

The single currency rose above its 200-day moving average at $ 1.2835 for the first time since Oct. 31.

The Canadian dollar continued to strengthen the four-day, rising to a 13-month high against its U.S. counterpart, amid optimism that a complex stimulus in the U.S. and Europe will lead to a reduction in volatility.

The New Zealand dollar rose after Fitch Ratings affirmed the country's rating at AA,

The British pound rose to the highest level in four months against the dollar after a report showed that the trade deficit in the UK declined in July, as exports rose, adding signs that the economy is emerging from recession.

The dollar index fell 0.7% to 79.834, after falling to 79.806, which is a minimum of 8 May.