A move by the US Federal Reserve to drop its bias toward higher interest rates helped the dollar fall to a near two year low against the euro.

This morning the dollar stood at 1.3363 to the euro while the pound sterling was at 0.5082 to the greenback.

The Federal Reserve made its change in focus clear after a Federal Open Market Committee (FOMC) meeting saying that inflation was still its main concern, which investors took to mean a rate cut may be near.

"It seems the FOMC is signalling that growth may slow enough to address inflationary pressures," Reuters reports currency strategists at Morgan Stanley saying in a note to clients.

"Until we receive more clarity from Fed officials and the data path, we think the dollar will remain under pressure, particularly against higher yielders."

More was invested in the euro as traders took the view that the European Central Bank will increase euro zone interest rates this year from the current 3.75 per cent.