The dollar edged higher across the board at the start of the week, advancing by almost 1% against the Swiss franc. The US equity bourses traded slightly higher on the session, with the Nasdaq firming by 0.75% while the Dow Jones edged up by over 0.4%. Meanwhile, crude oil improved by over 1% to $81.59-per barrel and spot gold drifted lower by more than 0.3% to trade near $1,201.35 per ounce.

Traders are looking ahead to tomorrow's FOMC monetary policy decision, due out at 2:15 PM. Following last week's dismal non-farm payrolls report, in which the headline figure printed sharply worst than expected at -131k in July compared with a downwardly revised 221k jobs lost in June, there have been increased concerns the US economic recovery may be faltering, prompting speculation the Fed will need to ease policy to stimulate the economy. Some of the measures that may be discussed at the meeting include the Fed buying Treasuries and postponing any sales of its balance sheet assets.

The key highlight will be the accompanying Fed policy statement, since markets are looking for the FOMC to stand pat at tomorrow's meeting. It will be interesting to gauge whether there has been any further discussion over policy easing and to discern if deflationary pressures are a concern for Committee members.

Euro Drifts

The euro pulled backed against the greenback to settle around the 1.32-handle in a quiet session as traders largely take to the sidelines ahead of the FOMC decision on Tuesday. Economic data from Germany overnight was slightly better than expected, with the headline June trade balance printing at 14.1 billion euros compared with a 9.8 billion euro surplus in May. The current account surplus edged up to 12.9 billion euros versus a 1.8 billion euro reading in the prior month. In the session ahead, Germany will report its July CPI and WPI figures.

EURUSD holds steady around 1.3220, with resistance eyed 1.3250, backed by 1.3275 and 1.33. Subsequent ceilings are seen emerging at 1.3340, followed by 1.3380 and 1.34. On the downside, support is seen at 1.32, followed by 1.3150 and 1.31. Additional floors will emerge at 1.3070, backed by 1.3040 and 1.30.