FOREX-Euro reaches 3-month high as dollar sags on Fed easing prospects

* Graphic: World FX rates in 2019 http://tmsnrt.rs/2egbfVh
* Dollar struggles near multi-month lows vs euro, yen
* Aussie, kiwi also buoyant against greenback

(Adds details and quotes, updates prices)
By Shinichi Saoshiro
TOKYO, June 24 (Reuters) - The euro advanced to a
three-month high against the dollar on Monday, as bearish bets
on the U.S. currency remained solid after the Federal Reserve
signalled last week it could soon cut interest rates.
The euro stretched its rally last week, when it added 1.4%,
and rose about 0.15% to $1.1386 EUR= in early Asian trade, its
highest since March 22. It last traded at $1.1381.
The dollar index .DXY versus a basket of six major
currencies was a shade lower at 96.107, having struck 96.093 on
Friday, its lowest since March 21, after the Fed last week
opened the door for a potential rate cut as early as next month.
That weighed on the dollar and in turn reinvigorated its
counterparts such as the euro, which has had troubles of its own
including Italy's debt problem and the possibility of the
European Central Bank having to ease policy.
"It is true that the ECB may have to ease policy especially
with the Fed having shifted to an easing bias," said Yukio
Ishizuki, senior currency strategist at Daiwa Securities.
"But the ECB already employs a negative interest rate policy
and does not have much further room to ease even if they wanted
to, unlike the Fed. It is factors like these which have
seemingly supported the euro."
The dollar nudged up 0.1% to 107.395 yen JPY= after
retreating to a near six-month low of 107.045 on Friday.
The U.S. currency was pressured further against the yen,
which often serves as a safe haven in times of political angst,
as tensions grew between Iran and the United States.
But it is difficult to see the greenback fall beyond 105 yen
as a sustained flight from dollar-assets was unlikely, said Koji
Fukaya, director at FPG Securities in Tokyo.
"For example the S&P 500 reached a record high thanks to
prospective rate cuts. Stronger investor risk appetite slows any
flight-to-quality into the yen," Fukaya said.
In focus was whether Washington and Beijing can resolve
their trade dispute at a summit in Japan this week of leaders
from the Group of 20 leading world economies.
Both China and the United States should make compromises in
trade talks, Chinese Vice Commerce Minister Wang Shouwen said on
Monday. The Australian dollar AUD=D4 rose to a 12-day high of
$0.6961 after Reserve Bank of Australia (RBA) Governor Philip
Lowe said it would be legitimate to question the effectiveness
of global monetary policy easing to boost economic growth.
The comments were perceived to be slightly less dovish as
just last week Lowe said a recent cut in Australia interest
rates to an all-time low of 1.25% would not be enough to revive
economic growth.
The Aussie was already on a steady footing after rebounding
from a five-month low of $0.6832 last week when the Fed's tilt
towards monetary easing helped offset bearishness from the
probability of policy easing in countries including Australia
and New Zealand.
The New Zealand dollar NZD=D4 traded near a 10-day peak of
$0.6605 scaled on Friday although the Reserve Bank of New
Zealand (RBNZ) is expected to echo the dovish sentiments of
other central banks when it holds a policy meeting on Wednesday.

(Editing by Shri Navaratnam and Jacqueline Wong)