The euro rose for a second straight day against the dollar on Tuesday after forecast-beating German data lifted sentiment toward the currency while investors steered clear of the US dollar ahead of a Federal Reserve decision on monetary policy. Traders said the euro could make further gains, especially against the dollar, if the Fed signalled more aggressive quantitative easing in the near term.

The euro was up 0.4 percent on the day at $1.2988 with a session peak in the New York session at $1.3010. The euro was also up 0.4 percent on the day at 1.2122 Swiss francs, after UBS mirrored Credit Suisse and levied a charge on some Swiss franc cash deposits. The dollar was last little changed at 82.36 yen, not far from an eight-month peak touched last month on growing expectations an election on Sunday could result in pressure for of more stimulus from the Bank of Japan.

Copyright Reuters, 2012