UPDATE

UPDATE ON SEPTEMBER 16

The dollar was mixed Tuesday, holding its ground

in the face of mounting financial turmoil as traders

awaited a rate decision by the Federal Reserve's rate-setting

Federal Open Market Committee.

The U.S. currency kept its upward bias after data showing

consumer prices fell 0.1% in August, in line with expectations.

.

The U.S. unit dipped slightly against the euro, which rose to $1.4238,

compared with $1.4190 previously.

Futures traders raised bets the Fed will lower its target interest

rate from 2% when it ends its meeting around 2:15 p.m. Eastern.

Earlier, the greenback tumbled to a four-month low, however, against

a broadly stronger Japanese yen, which continues to gain support as

traders around the world shun risk amid deepening worries over

the financial sector.

The dollar fell to 103.52 yen, before rebounding slightly to trade at

103.78 yen, still down from 104.27 yen Monday in late North American

trade. The euro fell 0.7% against the Japanese currency to 147.90 yen..

Risk aversion remains the primary theme of the foreign-exchange markets.

The yen has benefited in recent weeks as traders abandon once-popular

carry trades that centered on borrowing in low-yielding yen and then

using the proceeds to buy assets denominated in higher-yielding assets,

particularly Australian and New Zealand dollars.