The U.S. dollar was slightly higher against the euro Monday as traders looked to U.S. and European decisions on interest rates later this week. The euro bought US$1.2851 in European trading, down from US$1.2863 in New York late Friday. The British pound fell to US$1.9031 from US$1.9066 late Friday. The dollar bought 105.27 Japanese yen, up from 104.83 yen. At its meeting Tuesday, the U.S. Federal Reserve is widely expected to raise the federal funds rate by one-quarter of a percentage point, to 3 percent. That would be the eighth such increase since June 2004, when the central bank began its campaign to tighten credit. On Wednesday, the European Central Bank holds its monthly meeting to set interest rates for the 12 countries that use the euro. Analysts expect the ECB to leave its key refinancing rate at 2 percent, where it has stood for nearly two years.