FOREX-Dollar hovers near 11-week low on Fed rate cut bets

* Graphic: World FX rates in 2019 http://tmsnrt.rs/2egbfVh
* Fed rate cut views continue to weigh on dollar
* Euro steady, take Trump's comments on the currency in
stride

(Adds details and quotes, updates prices)
By Shinichi Saoshiro
TOKYO, June 12 (Reuters) - The dollar hovered near an
11-week low against its peers on Wednesday, weighed by
expectations the U.S. Federal Reserve could cut interest rates
some time in the next few months.
The dollar index .DXY versus a basket of six major
currencies was effectively flat at 96.707, trading just above
the 96.459 level it hit on Monday, its lowest since late March.
The index has been under pressure following a sharp decline
in long-term U.S. Treasury yields, which fell to near two-year
lows on Friday after a soft U.S. jobs report raised expectations
for an interest rate cut by the Fed.
Investor focus is now on the Fed's next policy meeting on
June 18-19 and what kind of signals the central bank could offer
on the direction of monetary policy.
"The market has priced in a rate cut by the Fed to a
significant degree," said Shinichiro Kadota, senior strategist
at Barclays in Tokyo.
"So the market is waiting for next week's Fed meeting as a
chance to see by how much and for how long it is ready to ease
policy."
Expectations for a central bank rate cut this year rose last
week after a number of Fed officials, including Chairman Jerome
Powell, hinted they were open to easing monetary policy.
According to the CME Group's FedWatch Tool, interest rate
futures traders are pricing in a 17% chance of easing at the
Fed's meeting next week and an 80% chance at the following
meeting in July.
The euro EUR= was steady at $1.1330 and in close reach of
a three-month peak of $1.1348 scaled on Friday.
The single currency was little affected by U.S. President
Donald Trump's accusation that Europe was devaluing the euro,
which has gained roughly 1.4% against the dollar so far in June.
Trump tweeted on Tuesday that the euro and other currencies
are devalued against the dollar and put the United States at a
big disadvantage. "For the first time in a while the U.S. president decided to
criticise the currency policies of other countries," said Makoto
Noji, chief currency and foreign bond strategist at SMBC Nikko
Securities.
"But his criticism lacked the strength of his earlier
statements on currencies. When he took office, Trump had
stressed that a weaker dollar was necessary to create U.S.
employment."
The dollar was little changed at 108.480 yen JPY= . The
greenback has crawled off a five-month low of 107.810 plumbed a
week ago when risk aversion in the broader markets heightened
demand for the safe-haven yen.
China's yuan CNH=D4 was steady in offshore trade at 6.9250
per dollar after bouncing back the previous day from seven-month
lows.
The yuan had risen on Tuesday after China's central bank
said it would sell yuan-denominated bills in Hong Kong in late
June, in a move that some market analysts believed was aimed at
stemming a sharp decline in the yuan. An escalation in the U.S.-China trade conflict has weighed
heavily on the yuan this year.

(Editing by Sam Holmes and Jacqueline Wong)