June 13, 2018 / 2:56 PM / 10 days ago

FOREX-Dollar mixed ahead of Fed's interest rate decision

    * Traders wait clues from Fed on U.S. rate hike path
    * Euro stuck below $1.18 ahead of Thursday's ECB meeting
    * Sterling gives up gains after Tuesday's Brexit vote boost

 (Updates market action, changes dateline, previous LONDON)
    By Richard Leong
    NEW YORK, June 13 (Reuters) - The dollar was weaker against
the euro but rose against some emerging market currencies and
hit a three-week high against the yen on Wednesday as investors
braced for what is expected to be the Federal Reserve's second
interest rate increase of 2018.
    The euro gained ground on the greenback amid expectations
that the European Central Bank on Thursday would signal its
intention to taper its 2.55 trillion euro ($3 trillion) bond
purchasing program later in 2018.
    Some emerging market currencies weakened versus the dollar
on the possibility of a Fed rate hike, while others rose.
Countries like Turkey with large external financing needs
are particularly vulnerable to rising dollar-funding costs.

    The U.S. central bank is due to release its latest policy
statement at 2 p.m. EDT (1800 GMT), followed by a press
conference half an hour later by Fed Chairman Jerome Powell.
    The Fed is expected to raise its benchmark overnight lending
rate by a quarter of a percentage point to a range of 1.75
percent to 2.00 percent. Investors will scour the statement for
clues as to whether the Fed will raise rates once or twice more
in the second half of 2018. 
    "If they paint a picture of stronger inflation and growth,
the market would take that as dollar-positive," said Richard
Scalone, co-head of foreign exchange at TJM Brokerage in
Chicago.
    At 10:17 a.m. (1417 GMT), the dollar was flat at 110.39 yen
 after earlier hitting a three-week high at 110.71 yen.
    The euro was up 0.25 percent at $1.1770 and was 0.36
percent stronger at 129.96 yen.
    Among emerging market currencies, the Turkish lira
was down 1 percent at 4.646 lira per dollar, while South
Africa's rand firmed 0.2 percent to 13.300 rand per
dollar.
    The British pound dipped to a one-week low of $1.3309
, unable to hold gains made on Tuesday when it briefly
rose to $1.3424 after British Prime Minister Theresa May saw off
a parliamentary rebellion over amendments to a bill for the
country's exit from the European Union next year.
    Slower-than-expected British inflation data on Wednesday
also hurt the pound, as it weakened the case for a Bank of
England rate rise in August.
    The Canadian dollar, which has fallen heavily in recent
weeks on concerns an escalating trade dispute with the United
States would hit Canada's economy hard, rebounded nearly 0.2
percent to C$1.2992, above what was nearly a
three-month low of C$1.3068 set last week.
    The Norwegian crown rallied for a second straight session
against the dollar and the euro, hitting its
strongest level against the single currency since late October
after an upbeat central bank survey raised expectations of
tighter monetary policy.           
========================================================
    Currency bid prices at 10:21AM (1421 GMT)
 Description      RIC         Last           U.S. Close  Pct Change     YTD Pct     High Bid    Low Bid
                                              Previous                   Change                 
                                              Session                                           
 Euro/Dollar      EUR=        $1.1772        $1.1743     +0.25%         -1.87%      +1.1782     +1.1731
 Dollar/Yen       JPY=        110.4100       110.3600    +0.05%         -2.01%      +110.7100   +110.3600
 Euro/Yen         EURJPY=     129.97         129.62      +0.27%         -3.85%      +130.1300   +129.6200
 Dollar/Swiss     CHF=        0.9850         0.9866      -0.16%         +1.10%      +0.9895     +0.9848
 Sterling/Dollar  GBP=        1.3358         1.3370      -0.09%         -1.14%      +1.3376     +1.3310
 Dollar/Canadian  CAD=        1.2985         1.3013      -0.22%         +3.24%      +1.3046     +1.2983
 Australian/Doll  AUD=        0.7584         0.7571      +0.17%         -2.78%      +0.7593     +0.7556
 ar                                                                                             
 Euro/Swiss       EURCHF=     1.1599         1.1587      +0.10%         -0.77%      +1.1622     +1.1587
 Euro/Sterling    EURGBP=     0.8811         0.8781      +0.34%         -0.81%      +0.8826     +0.8780
 NZ Dollar/Dolar  NZD=        0.7038         0.7005      +0.47%         -0.68%      +0.7049     +0.6996
 Dollar/Norway    NOK=        8.0210         8.0496      -0.36%         -2.27%      +8.0583     +8.0108
 Euro/Norway      EURNOK=     9.4436         9.4575      -0.15%         -4.11%      +9.4606     +9.4250
 Dollar/Sweden    SEK=        8.6214         8.6427      -0.02%         +5.12%      +8.6538     +8.6018
 Euro/Sweden      EURSEK=     10.1507        10.1526     -0.02%         +3.17%      +10.1582    +10.1220
 

($1 = 0.8497 euros)

    
 (Additional reporting by Tommy Wilkes in LONDON
Shinichi Saoshiro in TOKYO; Editing by Keith Weir and Paul
Simao)
  
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