* Fed rate rise on Wednesday more than 90 pct priced-in
* Euro retreats as Netherlands votes
* Sterling steadies after weak UK wages
* Graphic: World FX rates in 2017 tmsnrt.rs/2egbfVh
By Ritvik Carvalho
LONDON, March 15 The dollar was subdued in
European trade on Wednesday, with the Federal Reserve expected
to raise U.S. interest rates and investors looking for clues on
future Fed monetary policy.
Fed fund futures price in a more than 90 percent
chance of a rise in rates on Wednesday, and attention is
shifting to whether the Fed is now set for regular quarterly
"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 dollar edged 0.1 percent lower to
114.65, remaining shy of last week's 115.51 peak, its
highest level since Jan. 19, as expectations built for the rate
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 gained 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.
The pound was last up 0.3 percent on the day at $1.2195,
dipping below $1.22 after UK data showed wage growth slowed in
the three months to January.
British Prime Minister Theresa May won parliamentary backing
on Monday to begin the process of leaving the European Union, as
Scotland considered another referendum on independence from the
The euro edged up 0.2 percent to $1.0624, as concern
about Wednesday's Dutch parliamentary election was offset by
market speculation the European Central Bank may be ready to
wind down its stimulus programme.
"The market is relatively calm as most people don't expect
the populist party to win the election," said Commerzbank
analyst Thu Lan Nguyen in Frankfurt.
The Dutch vote, taking place amid a diplomatic row between
the Netherlands and Turkey, is being closely watched as a test
of populist and anti-immigrant sentiment in Europe, before
national elections in France next month and in Germany in
The dollar index, which tracks the greenback against a
basket of six rival currencies, was off 0.1 percent, at 101.58
(Reporting by Ritvik Carvalho; Additional reporting by Tokyo
markets team; Editing by Larry King)