The U.S. dollar traded higher against the most major currencies ahead of the Fed's interest rate decision. Investors expect that the Fed might keep its interest rate on hold for a longer period as recent released U.S. economic has been mixed. They are awaiting new signs for further monetary policy in the U.S.

The euro traded lower against the U.S. dollar. The Gfk German consumer confidence index increased to 9.3 in February from 9.0 in January, beating forecasts for a rise to 9.1. That was the highest level since November 2001.

Investors remained cautious amid concerns over Greece's future policy. Syriza party won the country's parliament elections on Sunday. The party has pledged to renegotiate the terms of the country's €240 billion euro financial bailout and to reverse many of the austerity measures.

The British pound traded lower against the U.S. dollar in the absence of any major economic reports from the U.K.

The Swiss franc traded lower against the U.S. dollar. Switzerland's UBS consumption indicator increased to 1.42 points in December from 1.29 points in November.

Speculation that the Swiss National Bank (SNB) was intervening in the market still weighed on the Swiss franc. The Swiss National Bank (SNB) Vice President Jean-Pierre Danthine said in an interview with the Tages-Anzeiger newspaper published on Tuesday that the central bank is prepared to intervene in markets.

The New Zealand dollar traded lower against the U.S. dollar ahead the Reserve Bank of New Zealand's interest rate decision. In the overnight trading session, the kiwi traded higher against the greenback in the absence of any major economic reports from New Zealand.

The Australian dollar traded lower against the U.S. dollar. In the overnight trading session, the Aussie rose against the greenback despite the weaker-than-expected consumer inflation from Australia. Australia's consumer price index climbed 0.2% in the fourth quarter, missing forecasts of a 0.3% rise, after a 0.5% increase in the third quarter.

On a yearly basis, Australia's consumer price inflation declined to 1.7% in the fourth quarter from 2.3% in the third quarter, missing expectations for a rise to 1.8%.

The Japanese yen traded mixed against the U.S. dollar in the absence of any major economic reports from Japan. In the overnight trading session, the yen traded mixed against the greenback.