LONDON, Oct 9: The euro staged a modest rally against the dollar in late trading here on Tuesday as investors awaited publication of minutes from the last Federal Reserve meeting for hints as to the direction of US monetary policy.

The single European currency was at $1.4090 against $1.4042 late Monday in New York. But the euro at one point had fallen to $1.4015, its lowest reading since September 20.

The Federal Reserve was to release later on Tuesday the minutes of a meeting of its policymakers September 18 that surprised markets by approving a half point interest rate cut to offset the effects a global liquidity crisis.

“Investors will particularly be interested in whether the Fed views further and deeper cuts (as) necessary to stop the housing slump and reflate the economy,” said Geoffrey Hu, currency strategist at UBS.

“The dollar’s best attempts to recover recent losses have been driven by hopes of the US avoiding any recession and as such, an aggressively dovish message may not necessarily be viewed as dollar-negative,” he added.

European traders and political leaders have also fretted about the Chinese yuan, which they maintain is unfairly undervalued, giving Chinese goods an advantage on global markets.

In late European trading on Tuesday, the euro changed hands at $1.4090, against $1.4042 late on Monday, 164.88 yen (164.88), 0.6934 pounds (0.7120) and 1.6681 Swiss francs (1.6665).

The dollar stood at 116.96 yen (117.40) and 1.1839 Swiss francs (1.1867).

The pound was being traded at $2.0325 ($2.0353).—AFP