By Ankur Banerjee
       SINGAPORE, Jan 2 (Reuters) - The dollar was steady on
the first trading day of the year as traders weighed the
prospect of steep interest rate cuts from the Federal Reserve in
2024 and looked to economic data this week for clues on the
central bank's next moves. 
    The dollar index, which measures the U.S. currency
against six rivals, fell 2% in 2023, snapping two years of
gains, and was last at 101.43, up 0.049% on Tuesday. 
    Markets are now pricing in an 86% chance of rate cuts to
start from March, according to CME FedWatch tool, with over 150
basis points (bps) of easing anticipated in the year.
    "The question is when and how fast rate cuts will be
delivered," Marc Chandler, chief market strategist at
Bannockburn Global Forex, said in a note.
    "Moderating price pressures and weaker growth impulses have
seen the pendulum of market sentiment swing dramatically from
the 'higher for longer' mantra of most of last year to pricing
in aggressive easing" from central banks, Chandler said.
    The focus now switches to a slew of economic data due this
week, including the data on job openings and nonfarm payrolls.
Minutes from the last Fed meeting in December are scheduled for
release on Thursday and will provide insight into the central
bankers' thinking around rate cuts this year. 
    At its December policy meeting, the Fed adopted an
unexpectedly dovish tone and forecast 75 basis points in rate
reductions for 2024.   
    That contrasted with other major central banks, including
the European Central Bank (ECB) and Bank of England (BoE), which
reiterated they will hold rates higher for longer.
     Still, traders are pricing in 158 bps of cuts by the ECB
this year, while the BoE is also expected to cut rates by 144
bps in 2024.
    The euro was down 0.07% to $1.1036, inching away
from the five-month peak of $1.11395 it touched last week. The
single currency gained 3% last year, its first yearly gain since
2020.
    Sterling was last at $1.2726, up 0.02% on the day,
having clocked its strongest yearly performance last year since
2017 with a 5% gain. 
    Meanwhile, the Japanese yen weakened 0.24% to
141.20 per dollar to start the year on the back foot, having
slid 7% against the dollar in 2023. 
    The spotlight is squarely on whether the Bank of Japan will
exit negative interest rates in 2024, even as the central bank
continues to stand by its dovish line. Tokyo markets are closed
for a holiday, keeping volumes light on the day.
    A powerful earthquake that hit central Japan on New Year's
Day killed at least six people, as authorities early on Tuesday
reported bodies being pulled from the rubble of collapsed
buildings.
    Elsewhere, the Australian dollar was little changed
at $0.6813, having ended 2023 broadly flat. The New Zealand
dollar was 0.08% lower at $0.6314.
    ========================================================
    Currency bid prices at 0104 GMT
 Description      RIC         Last           U.S. Close  Pct Change     YTD Pct     High Bid    Low Bid
                                              Previous                   Change                 
                                              Session                                           
 Euro/Dollar                  $1.1039        $1.1046     -0.06%         +0.01%      +1.1046     +1.1035
 Dollar/Yen                   141.2200       141.0450    +0.13%         +0.14%      +141.3750   +140.9400
 Euro/Yen                                                                                     
 Dollar/Swiss                 0.8423         0.8416      +0.11%         +0.11%      +0.8426     +0.8409
 Sterling/Dollar              1.2727         1.2730      -0.04%         +0.00%      +1.2735     +1.2724
 Dollar/Canadian              1.3236         1.3245      -0.06%         -0.14%      +1.3250     +1.3224
 Aussie/Dollar                0.6819         0.6810      +0.12%         +0.00%      +0.6819     +0.6806
 NZ                           0.6317         0.6319      -0.08%         -0.08%      +0.6323     +0.6313
 Dollar/Dollar                                                                                  
                                                                                                
    
All spots
Tokyo spots
Europe spots 
Volatilities 
Tokyo Forex market info from BOJ 



    

    
 (Reporting by Ankur Banerjee in Singapore; Editing by Stephen
Coates)