FOREX-Dollar stalls ahead of Fed meeting as rate move eyed

(Adds analyst quote; updates rates)
By Kate Duguid
NEW YORK, July 30 (Reuters) - The dollar hovered in a narrow
range on Tuesday, a day before the conclusion of a U.S. Federal
Reserve meeting at which policymakers are expected to cut
interest rates for the first time since the financial crisis.
The forecast 25-basis-point cut would be aimed at insulating
the U.S. economy from global uncertainties and trade pressures,
in contrast to interest rate cuts by countries facing more
imminent risks. Markets will be watching for guidance on whether
the Federal Open Market Committee's expected move is a one-time
cut or the beginning of a rate-cutting cycle.
"The market is on hold waiting for the FOMC meeting
tomorrow. That is expected to be the next driver of price action
at a general level," said Shahab Jalinoos, global head of
foreign exchange strategy at Credit Suisse in New York.
The euro EUR= on Tuesday steadied above the 26-month low
it reached last week of $1.110. A Fed cut could extend the
euro's broader move lower.
"The outlook for transatlantic monetary policy seemingly
favors a weaker EURUSD on the notion that ECB easing would be
out of necessity, whereas lower U.S. rates would mostly be
insurance against global headwinds," said Joe Manimbo, senior
market analyst at Western Union Business Solutions.
The pound was the biggest mover in the foreign exchange
market, plunging to a new 28-month low of $1.212 GBP= in Asian
trading on growing concerns that Britain could crash out of the
European Union without a transition agreement on Oct. 31.
Sterling was last down 0.44% at $1.216. It was also weaker
against the euro by 0.52% at 91.66 pence, after touching a
two-year low of 91.88 pence.
"Clearly in the UK, sterling is moving due to local
political developments - most importantly the idea that Prime
Minister Johnson may not want to meet European leaders unless
they change their position, which is a more hardline stance than
the market would have expected as recently as a week ago," said
Jalinoos.
The Japanese yen was last up by 0.16% at 108.62 yen per
dollar JPY= after the Bank of Japan on Tuesday maintained its
pledge to keep short-term interest rates at a negative 0.1% via
aggressive bond purchases, as expected.
"The Bank of Japan meeting did not deliver anything
materially new. There was a minor change in the wording of the
statement, but it does appear that Japan is going to wait and
see what materializes from the Fed and ECB before taking
action," said Jalinoos.