The U.S. dollar climbed against most major peers on Tuesday as Federal Reserve started its monetary policy meeting.

The Federal Open Market Committee kicked off its two-day monetary policy meeting on Tuesday and is widely expected to raise interest rates.

Market expectations for a March rate hike were around 95.2 percent, according to the CME Group's FedWatch tool.

On the economic front, the Producer Price Index for final demand increased 0.3 percent in February, seasonally adjusted, the U.S. Labor Department Tuesday.

The dollar index, which measures the greenback against six major peers, was up 0.35 percent at 101.660 in late trading.

In late New York trading, the euro fell to 1.0620 dollars from 1.0658 dollars in the previous session, and the British pound dropped to 1.2164 dollars from 1.2235 U.S. dollars in the previous session. The Australian dollar inched down to 0.7568 dollar from 0.7578 dollar.

The U.S. dollar bought 114.66 Japanese yen, lower than 114.80 yen of the previous session. The U.S. dollar rose to 1.0092 Swiss franc from 1.0074 Swiss franc, and it climbed to 1.3485 Canadian dollars from 1.3449 Canadian dollars.