By Sinéad Carew and Nell Mackenzie NEW YORK/LONDON (Reuters) -Wall Street indexes fell modestly while European equities advanced as U.S. investors awaited earnings reports from megacap companies and the Federal Reserve's next policy decision,

“Further euro strength is likely to be self-defeating,” said Valentin Marinov, a currency strategist at Crédit Agricole, a French bank. Exports were already likely to weaken and become a drag on the eurozone economy because of U.S. tariffs and European government policies that would encourage more imports.

Euro falls against dollar, with Trump's tariffs seen as slowing European growth

The U.S. dollar was extending its bounce versus the euro for a second day on Tuesday, finding support on what currency strategists said appeared to be substantial short covering versus the euro following the U.

Market players await United States data for additional clues. Progress in trade talks continues to benefit the American currency. EUR/USD pressures

Emerging-market borrowers are tapping the euro bond market at the fastest pace in over a decade, capitalizing on the rising demand for diversification away from the US dollar.