LONDONSINGAPORE, Jan 25 Reuters The dollar ticked up on Wednesday in subdued trading as investors looked towards the Federal Reserve39;s policy decision next week, while the euro slipped from near a ninemonth high.

The euro was down 0.12 against the dollar at 1.088, just off the 1.093 level reached on Friday, which was the highest since early May.

Meanwhile, the dollar was up 0.1 against the yen , at 130.28 yen per dollar, having hit an 8month low of 127.22 on Jan. 16.

Alvin Tan, head of Asia FX strategy at RBC Capital Markets, said markets were quiet due to the Lunar New Year holidays and the Fed.

Much of Asia is still on holiday, Tan said. We have the Fed coming up very soon and I think there39;s a bit of caution ahead of that.

A drop in global energy prices and a resulting slowdown in inflation in advanced economies has spurred speculation the U.S. Fed and other central banks might soon stop raising interest rates.

Those expectations have caused the dollar index , which surged on the back of Fed rate hikes last year, to fall more than 11 from September39;s 20year high of 114.78.

The index was up 0.11 to 102.02 on Wednesday. Sterling fell 0.23 to 1.231.

Traders broadly expect the Fed to increase rates by 25 basis points bps next Wednesday, a step down from a 50 bp increase in December. Before that, investors will scrutinise U.S. fourthquarter economic growth figures, due on Thursday.

Data on Tuesday showed euro zone business activity made a surprise return to…