Dollar weakens against euro and Swiss franc as markets digest Fed speeches

(Refiles to make "markets" plural from "market" in headline)

By Chibuike Oguh and Stefano Rebaudo

NEW YORK (Reuters) -The U.S. dollar was poised to snap a three-day winning streak against the euro and Swiss franc on Monday, as investors digested a barrage of comments from Federal Reserve officials about its latest monetary policy stance.

The dollar hovered near levels seen before last week’s decision by the Fed to begin cutting interest rates. The current pricing is consistent with the central bank’s messaging, which highlighted rising concerns over the U.S. labour market as the key driver of policy, analysts said.

“The lack of significant data until Friday’s core Personal Consumption Expenditures (PCE) inflation release leaves investors open to rethinking Fed rate cuts and the plan ahead,” said Bob Savage, head of markets macro strategy at BNY.

The dollar was last down 0.38% to 0.792 against the Swiss franc, on track to snap three straight sessions of gains.

St. Louis Federal Reserve President Alberto Musalem said he supported the rate cut at last week's Fed meeting as a precautionary move to protect the job market, but said there may be "limited room" for further reductions given inflation above the Fed's 2% target.

Changes in immigration, tax and regulatory policies are set to drive down underlying interest rates in the U.S., and make current monetary policy far too restrictive for what the economy needs to keep inflation at the Fed's 2% target, Federal Reserve Governor Stephen Miran said on Monday.

Miran last week dissented when the Fed cut the benchmark rate by a quarter of a percentage point, saying that a half-point cut was warranted. Fed chair Jerome Powell speaks in Rhode Island on Tuesday.

"This whole week seeing a relative dearth of data and with the US Q2 earnings season having largely ended, traders may struggle to find direction for the better part of this week outside of worries about new "emergencies" and in the forthcoming Fed speeches, starting today," Macquarie FX analyst Thierry Wizman said in an investor note.

U.S. President Donald Trump criticised the Fed, urging the central bank to cut interest rates more aggressively.

"Today is more of a consolidating day," said Marc Chandler, chief market strategist at Bannockburn Forex in New York. "We had a strong dollar bounce after the FOMC meeting that has sort of stalled. I kind of thought we'd get a bit more of dollar gains ahead of the next batch of jobs data. It's a light economic week but what's of interest is that in the FOMC there's such a wide dispersion of views and this week over half the Fed are speaking and the highlight might be (Jerome) Powell tomorrow."

The euro was up 0.44% at $1.1796, poised to snap three consecutive sessions of losses against the dollar.

The dollar index, which measures the greenback against a basket of currencies including the yen and the euro, fell 0.39% to 97.34. It is on track to snap three straight sessions of gains.

The Swedish crown rose 0.75% to 9.356 versus the dollar before the central bank policy meeting on Tuesday. 

The dollar dropped 0.17% to 147.69 against the Japanese yen, poised for the second straight session of losses.

The Bank of Japan's hawkish shift in rhetoric last week fuelled speculation of a near-term rate hike but failed to support the currency.

Analysts said that political uncertainty ahead of the Liberal Democratic Party leadership election scheduled for October 4 was a factor in the Bank of Japan's caution over further rate hikes. 

Sterling rose against the dollar on Monday as investors paused following Friday's selloff driven by fiscal concerns. 

The pound was up 0.37% at $1.3516.

The Australian dollar rose 0.12% to $0.6599, reversing losses in early trade.

(Reporting by Chibuike Oguh in New York and Stefano Rebaudo; Editing by Jane Merriman, Lisa Shumaker and Chizu Nomiyama)