* Dollar set for weakest month in a year
* Yen back from the brink; strongest month in 2023
* Inflation data takes the spotlight
    

        * 
              MORNING BID EUROPE: Treasuries on the cusp of best
month
since 2008

By Ankur Banerjee
       SINGAPORE, Nov 30 (Reuters) - The dollar was rooted near
a three-month low on Thursday and was set to post its steepest
monthly decline in a year as investors ramped up bets that the
Federal Reserve is done with rate hikes ahead of a crucial
inflation report later in the day.
    The dollar index, which measures U.S. currency
against six rivals, eased 0.058% to 102.74, not far from 102.46
- its lowest since Aug. 10 it touched on Wednesday.
    The index is down 3.7% in November on growing expectations
the Fed will cut interest rates in the first half of 2024.
    The dollar clawed back some of its losses on Wednesday after
data showed the U.S. economy grew faster in the third quarter
than initially reported. 
    "I think it's still pretty much all about U.S. yields. And
by extension FOMC policy," said Carol Kong, currency strategist
at Commonwealth Bank of Australia.
    "Markets will continue to focus on what FOMC officials say
about the prospect of the upcoming rate-hike cycle."
    Investors will be all ears on Friday when Fed Chair Jerome
Powell takes the centre stage in the wake of Fed Governor
Christopher Waller on Tuesday flagging a possible rate cut in
the months ahead.
    But before that, the spotlight will firmly be on Thursday's
crucial personal consumption expenditure (PCE) price index - the
Fed's preferred measure of inflation.
    Christopher Wong, currency strategist at OCBC, said the data
will offer a glimpse into whether the disinflation trend seen so
far remains intact.
    "If core PCE undershoots expectations to the downside, then
USD may extend the move lower again." 
    U.S. financial conditions are the loosest since early
September and have eased 100 basis points (bps) in a month,
according to Goldman Sachs. The bank's global and emerging
market indexes ticked up a bit last week, but financial
conditions are also looser by around 100 bps from a month ago.
    U.S. rates futures markets are now pricing in more than 100
bps of rate cuts next year starting in May, and the two-year
Treasury yield is its lowest since July - it has
slumped nearly 40 bps this week alone.
    Meanwhile, 10-year notes are set for their
strongest month since the 2008 global crash, with yields down 59
bps for November so far. In Asian hours, the yield on 10-year
notes were last at 4.288%.
    The weakness in the dollar has buoyed most Asian and
regional currencies. Two of the best-performers are at the polar
opposite ends of the 'carry' spectrum - the New Zealand dollar
and Japanese yen.
    The kiwi got an extra boost on Wednesday following
the central bank's 'hawkish hold' - policymakers kept the key
cash rate at a relatively high 5.50%, but unexpectedly signalled
that it could be raised again if inflation doesn't moderate.
    The currency was 0.26% higher at $0.6172, staying close to
the four month peak of $0.6207 it touched on Wednesday. 
    Meanwhile, expectations that the Bank of Japan will soon end
its negative rate policy have pulled the yen up from the depths,
and in the process, eased pressure on the central bank to
support the currency via direct FX market intervention.
    On Thursday, yen strengthened 0.12% to 147.06 per
dollar, remaining close to the two-and-a-half month high of
146.675 per dollar it touched on Wednesday. The Asian currency
has firmed 3% against the dollar in November and is on course
for its strongest month this year.
        Bank of Japan board member Toyoaki Nakamura said on
Thursday the central bank will likely 
    need some more time
     before phasing out its massive stimulus.
  
    Sterling was last at $1.2696, up 0.02% on the day,
while the euro was down 0.01% at $1.0967 ahead of
inflation data from euro zone.
    The Australian dollar rose 0.31% to $0.6637 and is
up 4.7% in November - its steepest one-month gain in a year.
    
    ========================================================
    Currency bid prices at 0545 GMT
 Description      RIC         Last           U.S. Close  Pct Change     YTD Pct     High Bid    Low Bid
                                              Previous                   Change                 
                                              Session                                           
 Euro/Dollar                  $1.0965        $1.0969     -0.03%         +2.34%      +1.0984     +1.0966
 Dollar/Yen                   147.0950       147.3050    -0.14%         +12.09%     +147.1800   +146.8700
 Euro/Yen                                                                                     
 Dollar/Swiss                 0.8734         0.8737      -0.02%         -5.54%      +0.8739     +0.8718
 Sterling/Dollar              1.2693         1.2695      +0.02%         +4.99%      +1.2705     +1.2692
 Dollar/Canadian              1.3582         1.3589      -0.07%         +0.22%      +1.3594     +1.3576
 Aussie/Dollar                0.6637         0.6617      +0.32%         -2.63%      +0.6648     +0.6617
 NZ                           0.6166         0.6156      +0.17%         -2.88%      +0.6182     +0.6154
 Dollar/Dollar                                                                                  
                                                                                                
    
All spots
Tokyo spots
Europe spots 
Volatilities 
Tokyo Forex market info from BOJ 


    
 (Reporting by Ankur Banerjee and Vidya Ranganathan in
Singapore; Editing by Kim Coghill)