* Traders see just below 50% chance of ECB's cutting rates
* BOJ will pay attention to rising global uncertainties -Kuroda
* Falling U.S. yields pare dollar's gain vs euro
* Swiss franc hits two-year high vs euro on safe-haven demand
* GRAPHIC-World FX rates in 2019:
(Updates market action, adds quote)
By Richard Leong
NEW YORK, July 22 (Reuters) - The dollar and euro were little
changed on Monday as traders await decisions by the U.S. Federal
Reserve and the European Central Bank on how much and how fast they
may reduce interest rates, beginning with the ECB on Thursday.
Traders see about a 46% probability that European policymakers
will lower a key deposit rate by 10 basis points to -0.50 basis point
to combat risk from global trade tensions and anemic regional
inflation, based on local interest rates markets.
"The market is just waiting for what Draghi has to say about
policy," said Brendan McKenna, currency strategist at Wells Fargo
Securities, referring to ECB President Mario Draghi.
Rising chances of European interest rates sliding deeper into
negative territory pressured the euro lower against the dollar and
propelled the Swiss franc to a two-year peak against the single currency.
The greenback has been bogged down by bets the Federal Reserve
will likely cut U.S. interest rates for the first time in a decade,
also in response to global trade tensions and weak inflation. Data
published late on Friday showed speculators dialed back their net
bullish positions in the dollar against other G10 currencies to their
lowest level in a year.
In late U.S. trading, the euro was little changed at $1.1212,
rebounding from a session low of $1.1207.
The dollar moved lower in step with U.S. yields. The two-year
slipped to 1.801% early on Monday, which was below the Fed's
current target range of 2.25%-2.50% on short-term rates.
An index that tracks the greenback against a basket of currencies
was fractionally higher at 97.241.
U.S. rates futures implied traders positioned for a 23% chance the
U.S. central bank may lower its rate range by a bold half point at its
July 30-31 policy meeting, compared with 24% late on Friday, according
to CME Group's FedWatch tool.
"It doesn't look like they will be too aggressive with a cut
next week," McKenna said. "This is more of an insurance cut
and not a start of a prolonged easing cycle. The U.S. economy is still
Rates futures had rallied on Thursday with perceived chances for a
half-point rate cut soaring to 71% after a dovish speech by New York
Fed President John Williams. Those bets abated after a Fed spokesman
clarified that the remarks did not refer to "potential policy actions."
On Monday the yen did not move much, at 107.88 versus the dollar
and 120.95 against the euro , after Bank of Japan Governor Haruhiko
Kuroda said the central bank will monitor the impact of growing global uncertainties.
The Swiss franc fell to 1.0999 franc per euro earlier on
Monday, which was its strongest level against the common currency
since July 2017. ========================================================
Currency bid prices at 2:48PM (1848 GMT)
Description RIC Last U.S. Pct YTD Pct High
Bid Low Bid
Close Change Change
Euro/Dollar EUR= $1.1212 $1.1220 -0.07% -2.26%
Dollar/Yen JPY= 107.8700 107.7000 +0.16% -2.17%
Euro/Yen EURJPY= 120.95 120.86 +0.07% -4.18%
Dollar/Swiss CHF= 0.9816 0.9816 +0.00% +0.02%
Sterling/Dollar GBP= 1.2482 1.2500 -0.14% -2.16%
Dollar/Canadian CAD= 1.3109 1.3060 +0.38% -3.87%
Australian/Doll AUD= 0.7036 0.7042 -0.09% -0.18%
Euro/Swiss EURCHF= 1.1008 1.1014 -0.05% -2.19%
Euro/Sterling EURGBP= 0.8982 0.8971 +0.12% -0.02%
NZ NZD= 0.6767 0.6761 +0.09% +0.74%
Dollar/Norway NOK= 8.6078 8.5717 +0.42% -0.36%
Euro/Norway EURNOK= 9.6515 9.6180 +0.35% -2.57%
Dollar/Sweden SEK= 9.4064 9.3774 +0.19% +4.93%
Euro/Sweden EURSEK= 10.5480 10.5279 +0.19% +2.77%
GRAPHIC-Net speculative U.S. dollar positioning GRAPHIC-Bets on
bold first rate-cut from the Fed GRAPHIC-Bets on bold first
rate-cut from the Fed interactive GRAPHIC-Swiss franc vs euro
(Reporting by Richard Leong Additional reporting by Tommy Wilkes in
London Editing by Leslie Adler)
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