News: FOREX-Dollar tentative as investors assess rate-hike path

SINGAPORE, Jan 9 (Reuters) - The U.S. dollar was steady on Monday as investors digested a clutch of economic data released last week that stoked hopes of the Federal Reserve slowing the pace of its interest rate hikes.

Data on Friday showed U.S. nonfarm payrolls rose by 223,000 jobs in December, while a 0.3% rise in average earnings was smaller than expected and less than the previous month's 0.4%.

There were further signs of an economy slowing down, with the U.S. services industry activity contracting for the first time in more than 2-1/2 years in December amid weakening demand.

That led the dollar index =USD , which measures the U.S. dollar against six major currencies, 1.15% lower on Friday. On Monday, the index, which gained 8% in 2022, was 0.01% higher at 103.720.

Investors have pinned their hopes on the U.S. central bank toning down its aggressive monetary tightening policy. Fed fund futures 0#FF: now imply around a 25% chance of a half-point hike in February, down from around 50% a month ago. FEDWATCH

Analysts, however, point to the still tight labour market that is likely to concern Fed officials.

"December's payrolls report shows the U.S. jobs market remains too tight to allow the Fed to step down to a 25 bps rate hike next month," said Mansoor Mohi-uddin, chief economist at Bank of Singapore.

"We expect the Fed will stay more hawkish than the market anticipates, keeping us cautious on the near-term outlook for risk assets."

With the next Fed meeting scheduled at the start of next month, investors will focus on the consumer price index data due on Thursday.

Citi said it expects another "softer" core CPI print with some upside risk but said core inflation could pick up again in early 2023.

"We continue to expect the Fed to hike by 50 basis points in February as there are still strong underlying inflationary pressures and further loosening in financial conditions would likely not be a desirable outcome."

Elsewhere, the Brazilian real BRL= had yet to trade after supporters of far-right former President Jair Bolsonaro were arrested after invading the country's Congress, presidential palace and Supreme Court.

The Japanese yen JPY=EBS strengthened 0.12% versus the U.S. currency to 131.94 per dollar, while sterling GBP=D3 was last trading at $1.2099, up 0.06% on the day, having gained 1.5% on Friday.

The euro EUR=EBS was up 0.11% at $1.0656, after closing 1.17% higher on Friday.

The Australian dollar AUD=D3 rose 0.17% versus the U.S. currency to $0.689, while the kiwi NZD=D3 gained 0.02% to $0.635.

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	Currency bid prices at 0128 GMT 

 Description	  RIC		 Last		   U.S. Close  Pct Change	 YTD Pct	 High Bid	Low Bid 
											  Previous				   Change				  
											  Session											
 Euro/Dollar	   EUR=EBS	$1.0660		$1.0645	 +0.14%		 -0.51%	  +1.0668	 +1.0640 
 Dollar/Yen		JPY=EBS	131.8650	   132.0700	-0.13%		 +0.51%	  +132.2500   +131.7400 
 Euro/Yen		 																			 
 Dollar/Swiss	  CHF=EBS	0.9275		 0.9279	  -0.03%		 +0.32%	  +0.9279	 +0.9264 
 Sterling/Dollar   GBP=D3	 1.2104		 1.2093	  +0.12%		 +0.11%	  +1.2128	 +1.2092 
 Dollar/Canadian   CAD=D3	 1.3432		 1.3448	  -0.10%		 -0.85%	  +1.3444	 +1.3420 
 Aussie/Dollar	 AUD=D3	 0.6891		 0.6876	  +0.28%		 +1.14%	  +0.6907	 +0.6875 
 NZ				NZD=D3	 0.6348		 0.6350	  +0.01%		 +0.01%	  +0.6372	 +0.6337 
 Dollar/Dollar																				   

All spots FX= Tokyo spots AFX= Europe spots EFX= Volatilities FXVOL= Tokyo Forex market info from BOJ TKYFX

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World FX rates	https://tmsnrt.rs/2RBWI5E 

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