The dollar has fallen to a 13-month low against a trade-weighted basket of major currencies, extending recent declines as investors positioned for a Federal Reserve meeting starting later.

In early trades today, the dollar index fell to its lowest since June 2016 at 93.815.

It has fallen nearly 4% over the last month and more than 8% this year.

On the day, the euro is 0.09% higher against the dollar at $1.1649.

Undermining the case for a Fed rate increase in coming months, the dollar has been hit by weak US data that has contrasted with an improving economic outlook in Europe and China.

"I don't think this is a dollar-negative story so much as a relatively optimistic story for the other parts of the world and that continues to play through the currency markets," said Adam Cole, head of G10 FX strategy at RBC Capital Markets in London.

Prospects for tighter monetary policy in Europe and elsewhere could further complicate a policy conundrum for the Fed as it ponders a plan to reduce its stock of bonds purchased after the 2008 financial crisis.

The Fed meeting ends tomorrow.

Political ructions in Washington linked to alleged attempts by the Kremlin to meddle in last year's US presidential election have also weighed on the dollar, along with reduced inflation expectations.

Against the yen, the dollar eased slightly to 111, having slipped as low as 110.625 yen, its lowest since mid-June, yesterday.

The International Monetary Fund yesterday raised economic growth expectations for the euro zone and China as it kept global growth forecasts unchanged for this year and next.