The U.S. dollar was higher against its most major counterparts in the European session on Tuesday, as investors looked to the Federal Reserve's policy meeting beginning today amid hopes that the central bank is likely to start winding down the QE program due to growing inflationary pressures.

The central bank is currently purchasing $120 billion of bonds per month, which includes $80 billion of Treasury securities and $40 billion of mortgage-backed securities.

The Fed is expected to hold rate at 0 - 0.25 percent range.

Market participants have moved forward expectations for a rate liftoff to around the middle of next year in the wake of persistent inflationary pressures.

Key economic reports due this week include ADP private payrolls and ISM services PMI on Wednesday and initial jobless claims on Thursday, followed by nonfarm payrolls data on Friday.

The greenback advanced to 0.9131 against the franc and 1.1586 against the euro, off its early near a 3-month low of 0.9085 and a 4-day low of 1.1614, respectively. The greenback is seen finding resistance around 0.92 against the franc and 1.14 against the euro.

The greenback touched near a 3-week high of 1.3627 against the pound, from a low of 1.3668 hit at 3:30 am ET. On the upside, 1.34 is likely seen as the next resistance level for the greenback.

The greenback rose to a 6-day high of 1.2418 against the loonie, near 2-week high of 0.7458 against the aussie and a 2-week high of 0.7125 against the kiwi, after falling to 1.2362, 0.7532 and 0.7186, respectively in early trades. Near term resistance for the greenback is seen around 1.26 against the loonie, 0.73 against the aussie and 0.70 against the kiwi.

In contrast, the greenback weakened to a 4-day low of 113.46 against the yen from Monday's close of 113.99. The greenback may test support around the 112.00 region, if it falls again.

Looking ahead, Canada building permits for September will be released in the New York session.

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