*

Dollar buoyant, yen still under pressure

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Focus on private data releases as US government shutdown

drags

on

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Markets alert to more jawboning from Tokyo

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Rate decisions from BoE, RBA due this week

(Updates with early European trading)

By Rae Wee and Alun John

SINGAPORE/LONDON, Nov 3 (Reuters) - The dollar hovered

near a three-month high on Monday ahead of economic data this

week that will offer only vague clues about the health of the

U.S. economy and could reinforce the Federal Reserve's cautious

stance.

The Fed lowered interest rates by 25 basis points last week,

as expected, but Chair Jerome Powell signalled that may be the

central bank's last cut this year, citing the risk of making

additional moves without a more robust picture of the economy.

Were it not for the ongoing U.S. government shutdown, data

releases scheduled for this week, including U.S. non-farm

payrolls, would have helped with that picture.

However, with government releases likely to be delayed

again, investors will be left with ADP employment data and ISM

PMIs, though it seems unlikely these will move the dial

significantly.

A number of Fed bank presidents on Friday aired their

discomfort with the decision to ease policy, and traders are now

pricing in a roughly 68% chance of a 25 bp cut in December,

having seen such a move as likely ahead of last week's meeting.

The yen was at 154.1 per dollar, languishing near an

8-1/2-month low, pressured by wide interest rate differentials.

Meanwhile the euro was down 0.16% at $1.1513, its lowest in

three months, and the pound was 0.4% lower at $1.3118.

That left the dollar index, which measures the currency

against a basket of six other majors, up 0.16% at 99.89, its

highest since August 1.

The index has traded in a tight range of between around 96

and 100 over the last six months.

"All eyes are on whether it can break out of that range, and

if the rebound has legs," said Lee Hardman, senior currency

analyst at MUFG, adding that the main driver of the stronger

dollar was the hawkish repricing of Fed expectations.

The pound and the yen face their own pressures.

Even though Bank of Japan Governor Kazuo Ueda last week sent

the strongest signal yet that a rate hike was possible as soon

as December, markets remained underwhelmed by the central bank's

gradual approach, particularly given that the Fed has turned

more hawkish.

That has piled pressure on the yen, prompting jawboning from

Japanese authorities to stem the currency's slide.

The yen is approaching levels at which Japanese authorities

intervened in markets in 2022 and 2024 to support the currency.

"The yen could start to see more support as markets get

nervous about intervention as we get close to those levels,

though I don't think it's enough to change things on its own,"

said Hardman.

The yen was also pinned near last week's record low against

the euro, last trading at 177.4.

Sterling has softened as market expectations of another Bank

of England rate cut this year increased after

softer-than-expected inflation data released last month.

The BoE meets this week, with some analysts predicting a 25

basis point cut, though market pricing only reflects a one in

three chance of this occurring.

The Aussie inched up 0.1% to $0.6554, supported by

expectations that the Reserve Bank of Australia will hold rates

on Tuesday, following an uncomfortably high reading of core

inflation, while the dollar was up 0.27% to 0.8067 Swiss francs,

its highest in over three weeks.