(Recasts, adds comments)

By Tom Westbrook and Stefano Rebaudo

SINGAPORE, June 5 (Reuters) - The dollar steadied on

Wednesday, ahead of key U.S. economic data and a monetary policy

meeting in Canada that traders have bet will set off a

rate-cutting cycle for some of the world's biggest economies.

Investors await U.S. services data on Wednesday and more job

figures later in the week.

The

greenback

has languished at an almost two-month low as signs of a

softening U.S. economy on Monday boosted the case for earlier

Federal Reserve interest rate cuts.

The Bank of Canada meets a day ahead of a European

Central Bank meeting on Thursday. Markets price about a 75%

chance of a Canadian rate cut and a 95% chance of a cut in

Europe.

The Canadian dollar hugged the middle of a

months-long range at C$1.3678 per dollar - as did the euro

at$1.0881 - and at both meetings the outlook will be

in focus at least as much as the decision.

"If there's a green light to a lot more cuts this year, then

I think that could really weaken the Canadian dollar," said

Commonwealth Bank of Australia strategist Joe Capurso.

The U.S. dollar index rose 0.11% to 104.92. It hit

103.99 on Tuesday, its lowest level since April 9.

Investors were also closely watching Brent crude futures,

which hovered near four-month lows on Wednesday.

"If low oil prices cause disinflation to become a global

phenomenon again, we wouldn't expect more policy divergence, nor

a weaker dollar, as this would trigger 'dovishness' everywhere,"

said Thierry Wizman, global forex strategist at Macquarie.

The yen slipped about 0.6% to 155.90 per dollar, retracing

much of Tuesday's gains that were driven by investors unwinding

bets in emerging markets.

Japanese real wages fell for a 25th straight month in

April, data on Wednesday showed, as inflation outpaces nominal

pay rises. The yen is the worst-performing G10 currency this

year, by some margin, and on Tuesday BOJ Deputy Governor Ryozo

Himino said the central bank must be "very vigilant" to the

impact the currency's weakness could have on the economy and

inflation.

The Australian dollar he Australian and New Zealand

dollars edged up after domestic economic news proved less dire

than investors had feared.

The Aussie was last up 0.1% to $0.6657. The New Zealand

dollar rose 0.1% to $0.6184.

Emerging markets stabilised after a turbulent few days.

The Mexican peso steadied after dropping some 4% on

the dollar and nearly 6% on the yen since the ruling

left-wing Morena party was re-elected and, in coalition, within

reach of two-thirds majorities in both Congress chambers.

"The trigger ... has been the pricing that the Morena

party's majority in Congress (means a) mandate to push forward

with major structural reforms and see greater government control

over businesses and the economy - a factor that potentially

reduces Mexico's standing as an international hub," said

Pepperstone's head of research Chris Weston.

Heavy selling of the peso against the yen showed investors

pulling back on one of the most popular "carry" or

interest-earning trades.

"President-elect Sheinbaum has signaled responsible fiscal

policies and central bank autonomy," Macquarie's Wizman said,

adding that the selloff on Mexican assets looked overdone.

"The dust may settle soon, leading to a period of

outperformance for the Mexican peso," he added.

India's rupee dropped after recovering from a

seven-week low it hit as election results showed voters had

returned Narendra Modi on a much slimmer margin than had been

expected.