FOREX-Dollar set for biggest weekly drop in 3 months


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    * Graphic: World FX rates in 2019

    By Saikat Chatterjee
    LONDON, March 15 (Reuters) - The dollar slipped against its
rivals on Friday and was set for its biggest weekly drop in more
than three months before a U.S. central bank meeting next week
where policymakers will shed more light on the outlook for
interest rates.
    While no change in policy rates is expected next week after
the Fed paused a multi-year rate hiking cycle in January,
officials might strike a more cautious view on the outlook for
the global economy after a volatile week in currency markets.
    "We are coming to the end of a very exhausting week in
currency markets with the Brexit news and investors are waiting
to get more insights from the Fed," said Esther Maria Reichelt,
an FX strategist at Commerzbank.
     Against its rivals  .DXY , the dollar fell 0.2 percent to
96.61 in early London trading. For the week, it is set to weaken
0.7 percent, its biggest drop since early December.
    Antipodean currencies led by the Australian dollar  AUD=D3 
and its New Zealand counterpart  NZD=D3  were the biggest
gainers against the dollar after Beijing said it can use reserve
requirements and interest rates to support growth.*:nL3N2120UP
    The outlook for both those currencies is heavily correlated
with the outlook for the Chinese economy.
    The yen  JPY=EBS  remained firm after the Bank of Japan kept
monetary policy steady but tempered its optimism that robust
exports and factory output will underpin growth, giving a boost
to its perceived safe-haven status.
    Elsewhere, the pound paused for breath but stayed on course
for its biggest weekly gain in seven weeks on growing
expectations that Britain won't crash out of the European Union
without a deal on March 29.
    Sterling  GBP=D4  last traded at $1.3217, below Wednesday's
nine-month high of $1.3380 but up 1.8 percent so far this week,
the biggest such gain since late January after the UK parliament
voted to seek a delay in Britain's exit from the European Union,
following a decision to avert a no-deal Brexit.*:nL8N2112BD
    The Chinese currency in the offshore market  CNH=D3  also
remained firm against the dollar at 6.71 yuan per dollar.

 (Reporting by Saikat Chatterjee
Editing by Peter Graff)
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