Both the dollar and riskier Asian currencies held on to modest overnight gains on Tuesday, amid hopes for an easing in Sino-U.S. trade tensions and as investors waited for direction from this week's Federal Reserve meeting.

U.S. President Donald Trump said a trade agreement looked to be ahead of schedule on Monday, without detailing the timing, while the U.S. also said it was studying whether to extend tariff suspensions due to expire in December.

That followed remarks late last week from both U.S. and Chinese officials saying they were "close to finalising" a deal that lifted trade-exposed currencies such as the Australian dollar, while weighing on safe-havens such as the Japanese yen.

The Aussie kept its gains to stand just under a five-day peak at $0.6842, while the greenback held on to its progress against the yen to stand at 108.96 yen per dollar, just below a three-month high hit overnight.

The dollar was steady against the euro (EUR=) at $1.1096 and flat against a basket of currencies (DXY) at 97.755.

The New Zealand dollar was 0.2% higher at $0.6361. China's yuan, which hit a six-week high in offshore trade on Monday, before retreating, was steady at 7.0617 per dollar.

Beyond the trade headlines, the major focus this week is the Fed meeting.

The U.S. central bank is expected to cut rates for a third time in a row when it concludes its two-day meeting on Wednesday.

Investors are watching for any indication that further cuts are likely, with futures pricing suggesting an expectation for further easing in 2020.

The British pound, meanwhile, nudged lower to $1.2857, with Brexit hanging in the balance.

Source : Reuters