*

Dollar loiters near multi-year lows

*

Powell reiterates wait-and-see approach to rate cuts

*

Traders await US payrolls report for Fed cues

*

Trump's tax bill passes Senate; House of Representatives

up next

(Updates to European morning hours)

By Ankur Banerjee and Johann M Cherian

SINGAPORE, July 2 (Reuters) - Global stocks edged higher

and the dollar was pinned near a three-year low on Wednesday as

investors pondered the prospect of U.S. interest rate cuts and

the scramble for trade deals ahead of President Donald Trump's

July 9 deadline for tariffs.

Trump said he was not considering extending the deadline for

countries to negotiate trade deals with the United States, and

cast doubts again that an agreement could be reached with Japan,

although he expects a deal with India.

The European Union's trade chief is also expected to hold

negotiations this week in Washington to avert higher U.S.

tariffs.

Europe's STOXX 600 edged up 0.1%, and Germany's DAX

climbed 0.3% in early trading. Across the Atlantic,

futures tracking the S&P 500 pointed to a higher open

after the benchmark index eased from its record high in the

previous session.

MSCI's broadest index of Asia-Pacific shares outside Japan

witnessed a choppy session earlier in the day

and was last up 0.1%. However, trade ambiguities weighed on

Japanese stocks that lost 0.5%.

"You've seen it with other trade negotiations that they take

years if you want to do them properly," said Matthias Scheiber,

senior portfolio manager and the head of the multi-asset

solutions team at Allspring Global Investments.

"It's not something you negotiate within a week. I think

that's also what the U.S. is realizing now. If the tariffs get

ramped up again and the situation sours, short-term, we can

definitely see some volatility."

Data on Tuesday showed the U.S. labour market remained

resilient with a rise in job openings for May, sharpening the

focus on the payrolls report due on Thursday as investors try to

gauge when the Federal Reserve is likely to cut rates next.

Fed Chair Jerome Powell, under fire from Trump to cut rates

immediately, reiterated that the U.S. central bank plans to

"wait and learn more" about the impact of tariffs on inflation

before lowering interest rates.

Traders are pricing in about 64 basis points of cuts this

year from the Fed, with the odds of a move in July at 21%.

The dollar index, which measures the U.S. currency

against six rivals, hovered near its lowest since early 2022 and

was last at 96.705. Analysts have said that any signs of labour

market weakness could further weigh on the greenback.

TRUMP'S BILL

Investor focus over the last few days has pivoted to the

progress of Trump's massive tax-and-spending bill, which is

expected to add $3.3 trillion to the national debt, slash taxes

and reduce social safety net programmes.

The legislation heads to the House of Representatives for

possible final approval after U.S. Senate Republicans passed it

by the narrowest of margins.

The bill has stoked fiscal worries, but the reaction was

relatively muted in bond markets after it passed the Senate.

Aninda Mitra, head of Asia macro strategy at BNY Investment

Institute, said the legislation solidifies a steady

deterioration of the fiscal position and the debt trajectory of

the U.S. government.

"The near-term impact is mostly in the price, but the

uncertainty factor could keep term premia elevated. We don't

think long-term yields will fall back materially in the 6-12

month horizon."

Uncertainties about the outlook on public finances, trade

and interest rates have caused investors to flee U.S. assets and

look for alternatives. This was evident in the U.S. dollar's 10%

loss, its worst first-half performance since the 1970s.

In commodities, spot gold slipped 0.2% to $3,331 per

ounce, after surging 1% in the previous session. The yellow

metal is up 27% this year on safe-haven flows.