The Dollar rose to an almost one-month high versus the Euro on Tuesday, buoyed by growing views the Federal Reserve is ready to signal a pause in its interest rate cutting-campaign and by weak European economic data. Analysts expect the FOMC to cut the benchmark lending rate by 25bp to 2% and indicate a pause for now, after an aggressive exercise that has cut rates by 300bp since mid-September.

EurUsd dropped 0.47% to 1.5576 having touched 1.5541 intraday low. UsdJpy was 0.25% lower to 103.92 after posting 103.22 low. UsdChf rose 0.21% to 1.0364. GbpUsd dropped 1.17% to 1.9679. EurJpy dropped to a session low of 161.11 and was last trading at 161.81 down 0.74%. EurGbp also hit a four-week low against the pound at 0.7830, but later rallied to 79.17, up 0.71%.

While markets are expecting a slightly hawkish tone in the FOMC's statement accompanying the rate decision, poor economic data from the euro zone raised doubts on the ECB's ability too maintain its tough stance on inflation and interest rates. Data on Tuesday showed French consumer confidence fell to its lowest level since 1987 and German inflation in April undershot forecasts, with the annual rate slowing sharply, piling pressure on the Euro.

The Sterling was hurt by a warning from policy-maker David Blanchflower that Britain faced a real risk of recession unless the Bank of England took aggressive action. Analysts said the Euro's slide could be arrested if euro zone inflation data due on Wednesday does not show a moderation as widely expected by the market. Expectations for a Fed pause were a bit overstated, which could hurt the Dollar, they said. Data on Tuesday showed US consumer confidence plunged to a five-year low in April. Gross domestic product data on Wednesday may show the economy shrank in the first quarter and Friday's jobs report is expected to show payrolls fell 80,000 in April.