The dollar was fluctuating between small gains and losses against the euro and the yen in rangebound trade on Wednesday as investors stayed on the sidelines ahead of the Federal Reserve’s rate setting meeting. USD/JPY dipped 0.09% to 120.31, off its overnight high of 120.46. The dollar was higher against the euro, with EUR/USD easing 0.11% to 1.1255. The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was at 95.8. The dollar continued to trade in recent ranges as investors awaited the outcome of the Fed’s two-day policy setting meeting which was beginning later in the day. Investors remained on edge amid uncertainty over whether the Fed would hike short term interest rates for the first time in almost a decade on Thursday. An increase in interest rates would boost the greenback by making it more attractive to yield-seeking investors. Data on Tuesday showing that U.S. retail sales rose 0.4% in August after a 0.6% increase in July lent support to the view that the economic recovery is on track and offset data showing that manufacturing output slowed last month. Market participants were looking ahead to U.S. data on consumer inflation due out later Wednesday. Recent U.S. data has indicated that inflation is still weak, due to low oil prices and the stronger dollar, even as the labor market staged a strong recovery and the economy posted five consecutive quarters of growth. Fed Chair Janet Yellen has said that an interest rate increase is data dependent but has also indicated that she expects to begin raising rates before the end of the year.