FOREX-Dollar up vs euro after German vote on spending surge

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German parliament approves Merz's historic spending surge

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Central bank meetings this week focus on forward guidance

(Updates to U.S. morning)

By Saqib Iqbal Ahmed

NEW YORK, March 18 (Reuters) - The dollar rose against the euro on Tuesday as Germany's parliament approved plans for a massive spending surge on Tuesday and as the Federal Reserve kicked off its March policy meeting that could offer clues to the path of U.S. interest rates.

The euro was 0.2% lower at $1.0915, after hitting $1.0954 earlier in the session, its highest since October 10.

"(It's) a classic 'buy the rumour, sell the fact' sort of reaction really, which isn't too surprising," said Michael Brown, senior research strategist at Pepperstone.

"The buck has been ticking higher in recent trade anyway though, against most peers, which is helping the move to the downside along a little," he said.

The German parliament's approval of plans for a massive spending surge throws off decades of fiscal conservatism in hopes of reviving economic growth and scaling up military spending for a new era of European collective defence.

Broadly, currency market moves were largely muted as potential catalysts, including the German vote, developments on a possible Russia-Ukraine peace deal and policy announcements from major central banks in coming days, kept traders cautious. (Reporting by Saqib Iqbal Ahmed; Additional reporting by Stefano Rebaudo; Editing by Bernadette Baum)