* Fed rate hike expected, with focus on outlook, balance
* Major currency pairs treading water ahead of meeting
* New Zealand dollar slips after current account data
* Dollar nurses losses against Canadian dollar
TOKYO, June 14 The dollar eased on Wednesday
with investors looking past an expected U.S. rate hike later in
the day for clues on Federal Reserve policy for the rest of the
The dollar index, which tracks the greenback against a
basket of six major rivals, edged down 0.1 percent to 96.930
Against the yen, the dollar inched 0.1 percent lower to
109.98, while the euro added 0.1 percent to $1.1217
The Fed is scheduled to announce its monetary policy
decision at 2 p.m. eastern time (1800 GMT) on Wednesday at the
end of a two-day policy meeting, followed by a press conference
by U.S. Federal Reserve Chair Janet Yellen.
The Fed may also provide more clues on how it plans to
reduce its holdings of more than $4 trillion in Treasuries and
Economists polled by Reuters overwhelmingly see the U.S.
central bank hiking its benchmark rate to a target range of 1.00
to 1.25 percent this week, though expectations for further rate
increases are fading.
What emerges from the Fed meeting "is certainly going to
chart the course for a lot, including the strength of the
dollar," said Bill Northey, chief investment officer at the
private client group of U.S. Bank in Helena, Montana, who spoke
"There is some risk that we could see a more dovish
outlook," he said.
Fed funds futures on Tuesday suggested traders saw about a
29 percent chance of rates rising to 1.25-1.50 percent at the
Fed's Sept. 19-20 meeting, and a 57 percent chance of such a
move at its Dec. 12-13 meeting .
"What investors want to know most is the pace of rate hikes
going forward," said Ayako Sera, senior market economist at
Sumitomo Mitsui Trust in Tokyo.
"With many market participants worried about a dovish
outlook, a surprisingly hawkish one could catch some investors
off guard," she said. "The U.S. economy isn't doing so badly, so
anything is possible."
Traders and analysts appear divided over whether China's
central bank will once again follow the Fed and raise its
short-term rates, as it did in March.
Depreciation pressure on the yuan has abated, for now, after
authorities engineered sharp gains in May and changed the
calculation for the daily midpoint to flush out short sellers.
The Bank of Japan, which is also meeting this week, is
expected to keep its monetary policy unchanged.
The New Zealand dollar slipped 0.1 percent to $0.7215
after touching a low of $0.7197, moving away from the
previous session's nearly four-month high of $0.7228.
New Zealand's current account deficit as a proportion of
gross domestic product widened in the March quarter to its most
in a year, data out on Wednesday showed.
The dollar resumed its drop against its Canadian counterpart
after skidding to its lowest levels since late February in the
wake of hawkish comments from Bank of Canada Governor Stephen
Poloz, who signalled that the BOC could raise interest rates
sooner than previously thought.
The U.S. dollar slipped 0.1 percent to C$1.3221 after
falling as far as C$1.3209 overnight, its lowest since Feb. 28.
(Reporting by Tokyo markets team; Editing by Eric Meijer and