Market participants expect the Fed announcement could be a stimulus measure, or an affirmation that the US central bank is on a steady path to ease interest rates, a scenario viewed as negative for the dollar.
Fed Chairman Jerome Powell will speak on Friday and expectations are building that he will clarify Fed minutes released on Wednesday and deliver a dovish speech that would soothe market worries about the prospect of recession.
"Jackson Hole is going to provide an opportunity for the Fed to correct that communication mistake in the minutes," said Edward Moya, senior market analyst at OANDA in New York.
In morning trading, the dollar slipped 0.1% against a basket of major currencies to 98.218. The greenback also fell against the yen as well, down 0.2% at 106.37 yen, not far from last week's eight-month low around 105.05. The euro, meanwhile, edged higher against the dollar, up 0.1% at $1.1097, amid an uptick in euro zone business growth. In onshore trading, the yuan fell to 7.0752 per dollar, its weakest since March 2008, before recovering to 7.0732. In offshore trade, the dollar rose 0.29% to 7.0872 yuan.