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FOREX-Central bank rate bets send dollar, sterling lower

    (Updates prices, adds analyst comment, adds FX table)

      Fed seen raising rates by 25 bps on Wednesday - IRPR

      SNB expected to hike rates by 50 bps on Thursday - Reuters

      Markets split on 25 bps or no hike for BoE on Thursday -

      Norges Bank seen hiking by 25 bps on Thursday - Reuters

    By Hannah Lang and Joice Alves
       WASHINGTON/LONDON, March 21 (Reuters) - The dollar fell
and sterling steadied on Tuesday as traders reckoned banking
stress could keep the Federal Reserve and the Bank of England
from hiking rates much further, or at all, later in the week.
    Investors' focus has moved to a slew of central bank
meetings due this week after days of volatility in markets
caused by worries over the stability of the global banking
    The dollar index, fell 0.232% to 103.090, while
sterling edged 0.34% lower to $1.2234.
    Markets are pricing in a 85% chance of a 25-bp hike when the
Fed announces its monetary policy decision on Wednesday. The Fed
hikes' peak was seen at 5.5% only a few weeks ago, against about
4.8% now.
    The dollar has followed those expectations lower, though
general nervousness in financial markets has tempered selling.
    Sentiment is fragile as investors are concerned over the
outlook for the banking sector after U.S. lender First Republic
 shares tumbled nearly 50% on Monday on fears it will
need a second rescue.
     "(The Fed) should signal that inflation is still the focus
here, but obviously properly address what has been done, and
highlight what they can do to further prevent any further
contagion beyond First Republic," said Edward Moya, senior
market analyst at OANDA.
    Sterling moved a tad lower, staying close to an almost
seven-week high against the dollar, after data showed Britain
recorded a budget deficit of 16.68 billion pounds ($20.4
billion) in February, far above expectations in a Reuters poll.
    "Volatility in rates and the broader asset markets has been
extraordinary recently," said John Velis, FX and macro
strategist for the Americas at BNY Mellon, causing a
"substantial repricing" of future rate hikes.
    Norway's central bank Norges Bank is expected to raise its
benchmark interest rate by 25 bps to 3% this week to curb
inflation and prop up a weakening currency, according to a
Reuters poll.
    The Norwegian crown last fell 1.4% against the
dollar at 10.500.
    On Tuesday, minutes showing Australia's central bank had
agreed on March 7 to consider the case for a rate pause at its
April policy meeting, even before the recent bout of volatility
weighed on the Aussie, which fell 0.64% versus the
greenback at $0.668.
    The euro last rose 0.52% to $1.0775.
    In cryptocurrencies, bitcoin last rose 0.07% to
$28,098.00 after hitting a nine-month high on Monday. The
world's largest cryptocurrency rose 26% last week, its best
weekly gain since April 2019.
    Currency bid prices at 10:03AM (1403 GMT)
 Description      RIC         Last           U.S. Close  Pct Change     YTD Pct       High Bid    Low Bid
                                              Previous                   Change
 Dollar index                 103.0800       103.3400    -0.23%         -0.396%       +103.5100   +102.9900
 Euro/Dollar                  $1.0777        $1.0723     +0.50%         +0.57%        +$1.0789    +$1.0704
 Dollar/Yen                   132.2800       131.3100    +0.75%         +0.91%        +132.4450   +131.0500
 Euro/Yen                     142.54         140.82      +1.22%         +1.60%        +142.7900   +140.4300
 Dollar/Swiss                 0.9237         0.9293      -0.58%         -0.08%        +0.9316     +0.9234
 Sterling/Dollar              $1.2236        $1.2277     -0.33%         +1.18%        +$1.2282    +$1.2225
 Dollar/Canadian              1.3676         1.3665      +0.08%         +0.94%        +1.3698     +1.3644
 Aussie/Dollar                $0.6675        $0.6718     -0.62%         -2.05%        +$0.6726    +$0.6672
 Euro/Swiss                   0.9954         0.9962      -0.08%         +0.60%        +0.9978     +0.9950
 Euro/Sterling                0.8805         0.8731      +0.85%         -0.44%        +0.8816     +0.8731
 NZ                           $0.6188        $0.6247     -0.94%         -2.54%        +$0.6248    +$0.6183
 Dollar/Norway                10.5040        10.6490     -1.40%         +6.99%        +10.6940    +10.4740
 Euro/Norway                  11.3219        11.4106     -0.78%         +7.89%        +11.4537    +11.2877
 Dollar/Sweden                10.2963        10.3670     -0.19%         -1.07%        +10.4084    +10.2807
 Euro/Sweden                  11.0968        11.1183     -0.19%         -0.47%        +11.1429    +11.0832

 (Reporting by Hannah Lang in Washington and Joice Alves in
London; Editing by Christina Fincher, William Maclean and Alison

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