* 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: http://tmsnrt.rs/2egbfVh
(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.
ECBWATCH
"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 EUR=EBS 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 Treasury yield
US2YT=RR slipped to 1.801% early on Monday, which was below the Fed's current target
range of 2.25%-2.50% USFOMC=ECI on short-term rates.
An index that tracks the greenback against a basket of currencies .DXY 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 pretty strong."
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 JPY=EBS and
120.95 against the euro EURJPY=EBS , after Bank of Japan Governor Haruhiko Kuroda
said the central bank will monitor the impact of growing global uncertainties.
The Swiss franc EURCHF=EBS 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
Previous
Session
Euro/Dollar EUR= $1.1212 $1.1220 -0.07% -2.26% +1.1225 +1.1207
Dollar/Yen JPY= 107.8700 107.7000 +0.16% -2.17% +108.0600 +107.7100
Euro/Yen EURJPY= 120.95 120.86 +0.07% -4.18% +121.1600 +120.8100
Dollar/Swiss CHF= 0.9816 0.9816 +0.00% +0.02% +0.9840 +0.9804
Sterling/Dollar GBP= 1.2482 1.2500 -0.14% -2.16% +1.2520 +1.2456
Dollar/Canadian CAD= 1.3109 1.3060 +0.38% -3.87% +1.3119 +1.3041
Australian/Doll AUD= 0.7036 0.7042 -0.09% -0.18% +0.7057 +0.7032
ar
Euro/Swiss EURCHF= 1.1008 1.1014 -0.05% -2.19% +1.1035 +1.1000
Euro/Sterling EURGBP= 0.8982 0.8971 +0.12% -0.02% +0.9000 +0.8963
NZ NZD= 0.6767 0.6761 +0.09% +0.74% +0.6786 +0.6758
Dollar/Dollar
Dollar/Norway NOK= 8.6078 8.5717 +0.42% -0.36% +8.6084 +8.5686
Euro/Norway EURNOK= 9.6515 9.6180 +0.35% -2.57% +9.6534 +9.6129
Dollar/Sweden SEK= 9.4064 9.3774 +0.19% +4.93% +9.4145 +9.3825
Euro/Sweden EURSEK= 10.5480 10.5279 +0.19% +2.77% +10.5589 +10.5206
<^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^
GRAPHIC-Net speculative U.S. dollar positioning https://tmsnrt.rs/32FPnYI
GRAPHIC-Bets on bold first rate-cut from the Fed https://tmsnrt.rs/2XTkkpn
GRAPHIC-Bets on bold first rate-cut from the Fed interactive https://tmsnrt.rs/2Y3UHTf
GRAPHIC-Swiss franc vs euro https://tmsnrt.rs/32LkdiS
^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^>