Western Union notes:
The dollar cut session gains after a key Fed survey showed the Empire State index contracted for the second time in three months, falling to -2 in June from +3.1 in May. That was the weakest reading in more than two years and another sign of how the economy remains rough around the edges after contracting in the first quarter.
This week's main event for the dollar and broader currency markets will be the outcome of the Fed's two-day meeting on Wednesday with a statement due around 2 p.m. ET, along with the bank's new forecasts for growth, inflation and unemployment.
About 30 minutes later, the Fed chair, Janet Yellen, is due to speak with the media. Any message from the Fed that suggests a Sept rate hike appears a bit optimistic would leave the dollar vulnerable to a selloff.
