Euro higher as markets await Fed decision

The euro is higher against the dollar ahead of a much-anticipated U.S. Federal Reserve meeting that is expected to result in a big bond-buying program to support the economy.

The 16-nation euro bought $1.3938 in Tuesday morning European trading - up from $1.3888 in New York late Monday. The British pound climbed to $1.6070 from $1.6033, while the dollar was unchanged at 80.57 Japanese yen.

Investors expect the Fed to decide at its meeting on Tuesday and Wednesday that it will begin buying large amounts of U.S. government debt. That should drive down interest rates and trigger more borrowing and spending, but the prospect has weighed on the dollar for weeks.

On Monday, the dollar got some support from a surprisingly strong report on U.S. manufacturing.