London: World shares slipped from record highs on Tuesday as surging Chinese stocks took a breather and investors began to move to the sidelines before the Federal Reserve’s policy meeting.

The dollar also weakened and Wall Street was expected to open lower, with more macro data and company earnings set to give the Fed its latest look at the US economy.

European bourses also fell, while the dollar’s decline saw the euro reach a three-week high and helped the pound/srecover after weak UK growth data caused it to tumble.

Britain’s quarterly growth came in at 0.3 per cent, below forecasts of 0.5 per cent and the slowest pace in more than two years.

The figures came just nine days before a British election, which is already brewing doubts about Britain’s future cohesion and its membership of the European Union.

“I think the real risk is so much uncertainty,” said Societe Generale strategist Kit Juckes. “We could have two elections in 12-18 months, and that would just see a cacophony of policy suggestions that would only add to that uncertainty.” The pound dropped to $1.5188 and to 1.3950 versus the euro, then rebounded to $1.5295 and 1.3980 euro by 1200 GMT.

Britain’s FTSE stock index, which has been riding a wave of European highs, was left 1 per cent lower, although it fell less than Germany’s DAX and France’s CAC 40.

Overnight in Asia, MSCI’s broadest index of Asia-Pacific shares outside Japan had followed Wall Street lower, dropping 0.5 per cent, but only after touching its highest since January 2008.

The main culprit was Chinese shares, which dropped 1.4 per cent. They had almost doubled in value since October, when Western and domestic market-friendly trading links were set up. Hopes monetary policy would ease also helped.

Central scenarios

The Fed will hold no news conference and provide no forecasts when its meeting ends on Wednesday. Analysts expect little or no change in its policy statement after recent weaker-than-forecast domestic data.

The dollar, whose strength has been contributed to the soft data, sagged against most of the world’s other major currencies and was at a session low of 118.85 yen after touching 119.44 overnight. The Bank of Japan also meets this week.

“There’s been disappointment with the US data — that’s clear, and that’s feeding into the dollar price action,” said Phyllis Papadavid, senior global FX strategist at BNP Paribas in London. “But people are in wait-and-see mode ahead of the Fed.” US. Treasury bond yields inched lower. The euro climbed to a three-week peak of $1.0945, up from a 12-year low of $1.0457 in mid-March.

Greek Prime Minister Alexis Tsipras on Monday reshuffled the team handling talks with European and IMF lenders, a move seen as an effort to relegate Finance Minister Yanis Varoufakis and get talks back on track.

“He [Varoufakis] is creating a number of tensions, so that (reshuffle) can certainly help the negotiations,” Christian Noyer, one of the ECB’s top policymakers and Bank of France chief, said on Tuesday.

Benoit Coeure, another ECB heavyweight, stressed the bank was not expecting a Greek exit from the euro.

In commodities trading, crude oil extended Monday’s losses as ample supplies offset the conflict in Yemen and the falling number of US rigs drilling for oil.

Weekly US crude inventory data is also expected to show another high, and Saudi Arabia pledged to supply more oil to China if needed, which kept traders cautious after prices reached 2015 peaks last week.

Brent recovered as the dollar slipped but was still down about 0.2 per cent at $64.67 a barrel. US crude shed about 0.3 per cent to $56.80. Gold was up at $1,202 an ounce.