The dollar suffered its largest one day decline against the euro for two months yesterday amid growing expectations that the Federal Reserve could signal that US interest rates are close to a peak at its policy meeting today. The dollar traded1.1 per cent weaker against the euro at $1.1969 in late afternoon business.

The Fed is widely expected to raise rates by 25 basis points today and analysts expect the Fed will continue to tighten monetary policy in gradual steps. Instead, the dollar's weakness was caused in part by uncertainty around possible changes to language of the Fed's statement.