The dollar clawed back gains on Tuesday ahead of a Federal Reserve policy meeting, while interest rate jitters held back bonds and European shares firmed further on upbeat corporate news. The Federal Reserve is widely expected to raise overnight rates by a quarter point to 5 percent on Wednesday, with attention focussing on the accompanying statement for clues whether the Fed is ready for a pause in its near two-year monetary tightening campaign. The euro was down 0.21 percent on the day at $1.2676, while the dollar was up slightly at 111.85 yen after hitting an intraday trough of 111.23 yen overnight -- near an eight-month low of 110.97 yen hit on Monday. Europe's FTSEurofirst 300 index <.FTEU3> of top shares rose 0.2 percent to 1,402.39 thanks to further bullish earnings from the likes of Adidas (ADSG.DE: Quote, Profile, Research) but dealers said trade was still cautious. "The key question remains what the Fed says as opposed to what they do -- it would have to be quite a direct statement that the Fed will continue to tighten for the dollar to get a lift from here," Steve Noble, senior manager of FX sales at Lloyds TSB Financial Markets, said