EXPECTATIONS that the Federal Reserve will reaffirm its commitment to keeping United States interest rates near zero kept the dollar at a five-week low yesterday, while concerns about China's stuttering economy hit commodity markets.

The Federal Reserve, the European Central Bank and the Bank of England meet this week. All are expected to repeat or refine their "forward guidance" that borrowing costs will remain extraordinarily low as long as growth is sub-par and inflation poses no threat.

The Fed will be most closely scrutinized, having signalled plans to begin phasing out its ultra accommodative policy this year. Most economists are eyeing a September start but markets have scaled back views of any aggressive changes.

It is a shift that has seen the dollar give back three-quarters of June's 5 percent gain and the greenback remained under pressure as US trading began, having earlier hit a five-week low against a basket of currencies and one-month low against the yen.

"The dollar faces a lot of key event risk in the week ahead with the release of the US Q2 GDP report and the latest FOMC (Federal Open Market Committee) policy meeting on Wednesday, followed by the release of the US employment report for July on Friday," said Lee Hardman, currency strategist at Bank of Tokyo Mitsubishi.

Commodities markets were mostly softer, with both oil and copper at or near three-week lows. Concerns about demand weighed on crude, while nervousness ahead of Chinese manufacturing data on Thursday hit copper. With investors bracing for another round of disappointing economic news from the world's No. 2 economy Asian markets had been generally weaker.

Japan's Nikkei dropped 3.3 percent to hit a four-week low as those jitters were compounded by a stronger yen, which is negative for the country's exporters, and concerns that plans to increase the country's sales tax - Japan's most significant fiscal reform in years - could be watered down.

"A sense of caution is looming in the market, especially because investors are worried about a slowdown in the Chinese economy. And when they see a risk in Asia, they tend to buy the yen, and the Japanese market is hit by that," said Kyoya Okazawa, head of global equities at BNP Paribas.

In debt markets, German Bund futures edged back into negative territory in thin trade and eurozone periphery bonds eased.