(Updates prices, adds comment)
* U.S. Fed tipped to end 2-day meeting with 25 bps rate cut
* Advance reading of U.S. Q3 GDP due
* UK to hold general election on Dec. 12 to break Brexit
deadlock
* U.S.-China deal may not be ready for signing at APEC
summit
* Graphic: World FX rates in 2019 http://tmsnrt.rs/2egbfVh
By Dhara Ranasinghe
LONDON, Oct 30 (Reuters) - The dollar was largely steady
against other major currencies on Wednesday as investors braced
for a rate cut by the U.S. Federal Reserve and an advance
reading of economic growth in the third quarter that could shed
light on the rate outlook.
Sterling was a tad firmer, with Britain now set to hold its
first December election in almost a century after Prime Minister
Boris Johnson finally won parliamentary approval for a snap
ballot to break the Brexit deadlock. For now the spotlight turned to the Fed, which is expected
to cut rates for a third time in a row when it concludes its
two-day meeting on Wednesday. An advance reading of economic growth data in the third
quarter is due out before the Fed concludes its meeting and
comes ahead of other major data releases such as Friday's
non-farm payrolls report.
Economists polled by Reuters expect the U.S. economy grew
1.6% in the third quarter, compared with 2% the previous
quarter.
"In the last 4-5 weeks there has been a concern that the
consumer part of the market is starting to slow and that could
mean more cuts next year," said Derek Halpenny, European head of
global markets at MUFG in London.
"So what lies ahead post the Fed meeting, the GDP data,
payrolls will shape market expectations in addition to what (Fed
chief Jerome) Powell will say today."
The dollar was steady against the euro at $1.1114 EUR=EBS
and marginally lower versus a basket of six other major
currencies at 97.68 .DXY .
Against the Japanese yen, the greenback was little moved at
108.83 yen JPY=EBS , not far from its three-month high of
109.07 yen touched on Tuesday.
Investors are watching for any indication that further cuts
are likely, with futures pricing suggesting more easing is
expected in 2020. If that is not foreshadowed, traders expect
the dollar to rise.
"The Fed is treading a fine line at the moment and there's
no incentive to get off that and make a strong case one way or
another on rates," said Neil Mellor, senior currency analyst at
BNY Mellon in London.
"So if there's no equivocal view on Fed policy, there's no
equivocal view for the dollar."
RISK ASSETS
Optimism that Washington and Beijing would finalise the
first-stage of a trade deal next month had boosted risk assets
in recent days, but markets have turned wary.
A U.S. administration official said on Tuesday an interim
trade agreement between the United States and China might not be
completed in time for signing on the sidelines of an
Asia-Pacific summit in Chile next month, but that does not mean
negotiations are falling apart. The Chinese yuan inched up marginally as investors awaited
the outcome of the Fed meeting and more clarity on how Sino-U.S.
trade talks are going.
In the spot market, offshore spot yuan CNH=EBS was last
changing hands at 7.0550 per dollar, 0.15% firmer on the day.
Sterling meanwhile drew support from hopes that a disorderly
Brexit can be avoided with focus now on the December snap
election. GBP/
The British pound was last at $1.2891 GBP=D3 , a tad firmer
on the day but below five-month highs above $1.30 hit earlier
this month. It was also a fifth of a percent firmer against the
euro at 86.20 pence EURGBP=D3 .
Correlations between USD and Fed https://tmsnrt.rs/2pg9Tk1
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