Dollar slips on expectations for dovish Fed; rouble hits lows

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The U.S. dollar slipped against major currencies on Tuesday on expectations that the Federal Reserve would take a cautious tone on monetary policy, while a slide in oil prices pushed the Russian rouble to new lows and boosted the safe-haven yen.

Traders booked profits from the greenback's recent gains on the view that the Fed would maintain a dovish stance on raising interest rates, partly in response to lower oil prices, at the end of a two-day meeting Wednesday.

Expectations that the Fed will keep the phrase ``considerable time'' to describe when it will hike interest rates hurt the dollar since rate increases are expected to boost the greenback by driving investment flows into the United States.

 A drop in oil prices to fresh 5-1/2-year lows kept traders concerned about the global economy and pushed the dollar to a roughly one-month low against the safe-haven yen.

The rouble plunged more than 11 percent against the dollar in its steepest intraday fall since 1998 before recovering some losses on a rebound in oil prices. Tumbling oil prices threaten Russia's economy since sales of oil and gas are Russia's chief source of export revenue.

The dollar was last up 3.85 percent against the rouble to trade at 68.44 roubles.

The euro was last up 0.6 percent against the dollar at $1.2511, not far from a more than three-week high of $1.2569.

The dollar was last down 0.62 percent against the Swiss franc at 0.9597 franc, not far from an over three-week low of 0.9555.

The dollar was last down 1.04 percent against the yen at 116.60 yen, holding near a session low of 115.58, which was the lowest since Nov. 17.

On Wall Street, the benchmark S&P 500 stock index closed down 0.85 percent.