* Dollar steady as futures show even chances of Dec US rate hike
* Sterling skids on BOE policymaker's rate cut remarks
* New Zealand central bank seen cutting rates on Thursday
* Aussie slips on business confidence survey
TOKYO, Aug 9 (Reuters) - Sterling skidded in Asia on Tuesday on speculation of further UK policy easing, while the dollar held its ground amid growing confidence that the U.S. Federal Reserve could raise interest rates later this year.
Sterling slipped 0.4 percent to $1.2981 GBP= after Bank of England policymaker Ian McCafferty said in an op-ed for the Times that more quantitative easing was likely to be required if the UK's economic decline worsens. dollar index , which gauges the greenback against a basket of six major rivals, erased earlier slight losses and edged up 0.1 percent to 96.474 .DXY .
It held well above last week's low of 95.003, which was its lowest since late June.
Fed funds futures prices showed traders now see almost a 50-50 chance of a U.S. rate hike by December, according to CME Group's (NASDAQ: CME ) Fed Watch tool. That compares with 30 percent as recently as last week, before the better-than-expected nonfarm payrolls report on Friday.
The dollar was steady at 102.42 yen JPY= , a good distance above last week's low of 100.68 yen, while the euro edged down 0.1 percent to $1.1077.
"A lot of people are taking summer vacations in Japan this week, so volume is relatively low, and there aren't many market-moving factors," said Koji Fukaya, president of FPG Securities in Tokyo.
New Zealand's dollar was steady despite expectations that
the Reserve Bank of New Zealand will cut interest rates by 25 basis points to 2.00 percent on Thursday, when regional forex liquidity is likely to be thinner than usual due to a public holiday in Japan.
Some 24 of 25 economists polled by Reuters are expecting a rate cut. Economists expect the policy rate will be cut again to 1.75 percent by the fourth quarter and then hold steady, although some are predicting rates are headed even lower. market is pricing in 100 percent probability of a cut at the Reserve Bank of New Zealand's meeting," Marshall Gittler, head of investment research at FXPrimus, said in a note. "In fact it's pricing in 100 percent probability of at least one more cut this year after this one, maybe even two more."
"But with the highest interest rates in the G10 and risk aversion calming down - meaning carry trades becoming popular again - they have a lot of cutting to do," Gittler said, particularly since the market is also pricing in one more rate cut for the Australian dollar, the second-highest-yielding G10 currency.
The Australian dollar erased earlier gains and slipped 0.3 percent at $0.7625 AUD=D4 , while its kiwi counterpart was steady at $0.7133 NZD=D4 .
The currencies largely shrugged off data from China, Australia's largest trading partner, showing consumer price inflation accelerated at its weakest pace in six months as food prices rose at a slower pace. Aussie is off on the weak business confidence numbers from Australia. The Chinese numbers have had no effect," said Sue Trinh, senior currency strategist at RBC Capital Markets in Hong Kong.
National Australia Bank's NAB.AX monthly survey of more than 500 firms showed its index of business conditions dipped 3 points to +8 in July.
Add Chart to Comment
We encourage you to use comments to engage with users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind:
- Enrich the conversation
- Stay focused and on track. Only post material that’s relevant to the topic being discussed.
- Be respectful. Even negative opinions can be framed positively and diplomatically.
- Use standard writing style. Include punctuation and upper and lower cases.
- NOTE: Spam and/or promotional messages and links within a comment will be removed
- Avoid profanity, slander or personal attacks directed at an author or another user.
- Don’t Monopolize the Conversation. We appreciate passion and conviction, but we also believe strongly in giving everyone a chance to air their thoughts. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
- Only English comments will be allowed.
Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at Investing.com’s discretion.