* Euro dips before Thursday's ECB meeting
* Yen weakens towards 108 per dlr on rising risk appetite
* Yuan briefly jumps on report of trade war mitigation
* Graphic: World FX rates in 2019 http://tmsnrt.rs/2egbfVh
(Adds details, new quote, latest prices)
By Tommy Wilkes
LONDON, Sept 11 (Reuters) - The euro dipped on Wednesday but
most investors stuck to the sidelines ahead of a key European
Central Bank meeting on Thursday, with the scale of an expected
monetary easing package from euro zone policymakers uncertain.
After sliding to a more than two-year low earlier this
month, the euro has since rebounded as policymakers signalled
some doubt about restarting its bond buying package, known as
quantitative easing (QE), to boost the region's economy.
Expectations that policymakers will push interest rates even
further into negative territory have weighed on the euro
EUR=EBS , which has shed 3% since June.
"The euro has been doing a little better recently. That may
have to do with the fact we have seen some pushback by ECB
members for a QE programme," Commerzbank analyst Thu Lan Nguyen
said. "But I think expectations are still running quite high."
Medium-term, Nguyen said she expected the euro to weaken
versus the dollar as investors woke up to the limits to what the
ECB could do when the U.S. Federal Reserve, which is also
expected to cut rates next week, had much more room to ease
policy into 2020.
"Right now both are still capable of easing. At some point
the ECB will not be able to continue," she said.
The euro fell 0.2% to $1.1026 EUR=EBS , with bets divided
on the likely scope and style of any stimulus.
The dollar index .DXY ticked 0.1% higher to 98.467.
The ECB decision is likely to set the tone for upcoming
rate-setting meetings by the Federal Reserve and the Bank of
Japan next week, as well as for broader global risk appetite.
Elsewhere, the Japanese yen fell as the rush into safe-haven
assets during the summer continued to unwind on the back of
rising risk appetite.
The yen had rocketed towards a 2019 high as investors in
August fretted about the prospect of a global recession. Forex
traders often buy the yen in times of uncertainty because of
Japan's vast current account surplus and because they believe
Japanese investors will bring their money home when
international markets tumble.
But with broader stock markets recovering on hopes of easing
U.S.-China tensions and diminishing risks of a no-deal Brexit,
the yen is now weakening.
"Yen weakness has been reinforced overnight by speculation
that China will implement further measures to ease the negative
economic impact from the trade war with the U.S.," MUFG analysts
said in a note.
The yen was last down 0.2% at 107.70 yen JPY=EBS , some way
from the 104.46 levels of late August.
The Chinese yuan CNY= briefly jumped and extended its
recent recovery after the editor of the Global Times, a widely
read Chinese tabloid published by the ruling Communist Party's
official People's Daily, tweeted that China would introduce
measures to mitigate the impact of the trade war.
The offshore yuan later shed those gains and was last at
7.11 yuan per dollar CNH=EBS , unchanged on the day.
Sterling GBP=D3 rose marginally to $1.2371, but was near
its six-week high of $1.2385 hit earlier in the week as fears of
a no-deal Brexit recede.
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Euro vs U.S. dollar https://tmsnrt.rs/31k05Dm
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(Editing by Andrew Heavens and Alex Richardson)