* Fed rate rise on Wednesday more than 90 pct priced-in
* Euro retreats as Netherlands votes
* Sterling rebounds after plumbing two-month lows
* Graphic: World FX rates in 2017 tmsnrt.rs/2egbfVh
By Ritvik Carvalho
LONDON, March 15 The dollar was subdued in
European trade on Wednesday, staying range-bound ahead of an
expected U.S. Federal Reserve interest rate hike with investors'
eyes peeled for clues on the bank's future monetary policy.
Fed fund futures price in a more than a 90
percent chance of a rise in rates on Wednesday, and attention is
now focused on whether the U.S. central bank is now on course
for regular three-monthly rises in the months and years ahead.
"The 25 basis point hike is fully priced in, so that's not
even going to be a factor...it's more what the Fed's path is
going to be going forward," said Societe Generale currency
strategist Alvin Tan in London.
"We're thinking the 2017 dots indicating three hikes in
total is unlikely to be changed. But there's a good chance that
the rate path for 2018 and 2019 could be raised slightly higher,
in terms of the median dot path."
Against the yen, the greenback edged 0.1 percent lower to
114.65, remaining shy of last week's peak of 115.51, its
highest level since Jan. 19 as expectations built for the rate
"I think the dollar might have trouble above the 115 level
today, with Japanese exporters still seeking to sell above it
ahead of the end of the Japanese fiscal year this month," said
Kaneo Ogino, director at foreign exchange research firm
Global-info Co in Tokyo.
U.S. producer prices rose more than expected last month,
marking the most robust year-on-year gain in nearly five years.
The Bank of Japan also began a two-day monetary policy
meeting on Wednesday. It is expected to hold its policy steady
and stress that inflation is nowhere near levels that justify
talk of withdrawing its massive stimulus.
Sterling jumped to a week's high of $1.2258 in
early trade in Europe, rebounding from the previous day's
eight-week low hit on worries of a painful and prolonged Brexit
process. It was last up just over half a percent on the day at
British Prime Minister Theresa May won parliamentary backing
on Monday to begin the process of leaving the EU and start two
years of talks that will shape the future of Britain and Europe,
as Scotland mulled a possible second independence referendum.
The euro edged up 0.3 percent to $1.0631. It remained
below its Monday high of $1.0714, as concerns about Wednesday's
Dutch parliamentary election offset market speculation that the
European Central Bank could be poised to wind down its stimulus
The Dutch vote, taking place amid a diplomatic row between
the Netherlands and Turkey, is being closed watched as a test of
populist and anti-immigrant sentiment in Europe ahead of further
elections in France next month and in Germany in September.
The dollar index, which tracks the greenback against a
basket of six rival currencies, was off 0.2 percent, at 101.50
(Reporting by Ritvik Carvalho; Additional reporting by Tokyo
markets team; Editing by Mark Trevelyan)