FOREX-Currencies on guard ahead of major central bank decisions, key US data

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BoE, ECB, BOJ announce rate decisions this week

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US nonfarm payrolls, inflation data due

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Dollar holds near two-month low; euro, sterling steady

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Trump says leaning toward Warsh or Hassett for Fed Chair

(Updates to mid-morning Asia)

By Rae Wee

SINGAPORE, Dec 15 (Reuters) - The dollar was nursing losses on Monday while the euro and sterling held steady ahead of their respective central bank decisions this week, with focus squarely on the rate outlooks across major economies as the new year approaches.

Currencies mostly held tight ranges in Asia trade, as investors braced for a busy week which will also see the release of U.S. inflation data and the closely watched nonfarm payrolls report.

The New Zealand dollar fell 0.43% to $0.5777, after the country's top central banker on Monday pushed back on expectations of rate hikes next year.

Reserve Bank of New Zealand Governor Anna Breman reiterated the forward path for the benchmark official cash rate in last month's monetary policy statement, which indicates a slight probability of another rate cut in the near term.

"I guess that slight risk of a cut caught NZD longs off guard," said Christopher Wong, a currency strategist at OCBC.

Elsewhere, the yen strengthened after a closely watched survey showed on Monday that big Japanese manufacturers' business sentiment hit a four-year high in the three months to December.

The Japanese currency rose 0.3% to 155.39 per dollar.

The survey outcome reinforced expectations that the Bank of Japan (BOJ) is poised to raise rates later this week, though attention will be on guidance from Governor Kazuo Ueda regarding the future rate-hike path.

"We've long expected a hike in December, but I think it's going to be a dovish hike," said Joseph Capurso, Commonwealth Bank of Australia's (CBA) head of foreign exchange, international and geoeconomics.

"In Japan, you have a prime minister that clearly doesn't like rate hikes, and you've also got a governor that is very cautious."

Rate decisions from the Bank of England (BoE) and the European Central Bank (ECB) are also due this week.

Markets have almost fully priced in a cut by the BoE as still-elevated inflation in the UK shows signs of drifting downwards, while expectations are for the ECB to stand pat.

Traders have also begun speculating that a rate hike could be on the cards for the ECB in 2026.

Sterling eased 0.15% to $1.3360 in early Asia trade on Monday, while the euro was down 0.03% at $1.1736.

"In terms of the BoE, I think it's going to be very interesting. I think it's going to be a finely balanced decision to cut," said CBA's Capurso.

"The risk is that the inflation data that comes out this week may take out some of the pricing for follow-up rate cuts."

British inflation data is due on Wednesday.

KEY US DATA ON DECK

Over in the United States, a host of delayed data owing to the historic government shutdown are set to be released, giving investors a long-anticipated view of the world's largest economy.

The November jobs report is due on Tuesday, while inflation figures are out on Thursday.

Against a basket of currencies, the dollar held close to a roughly two-month low hit last week and stood at 98.37.

"This upcoming data is somewhat dated as well, and also is affected by the government shutdown, so there's a lot of noise in data," said Sim Moh Siong, a currency strategist at Bank of Singapore.

"From policymakers' perspective... this set of data, whatever the outcome is, they will probably interpret it more carefully than usual. The main thing you want to do is to tease out the trend in terms of the labour market in the U.S.."

A divided Federal Reserve cut rates last week, but Chair Jerome Powell signalled borrowing costs are unlikely to drop further in the near term while awaiting more economic clarity.

U.S. President Donald Trump said on Friday he is leaning toward either former Fed Governor Kevin Warsh or National Economic Council Director Kevin Hassett to lead the central bank next year.

In Asia, data on Monday showed China's factory output and retail sales grew at their weakest pace in over a year in November, compounding challenges for policymakers who are struggling to find fresh ways to keep the $19 trillion economy humming.

The Australian dollar, often used as a liquid proxy for the yuan, was down 0.12% to $0.6646, though the onshore yuan strengthened to an over one-year high of 7.0500 per dollar.

(Reporting by Rae Wee Editing by Shri Navaratnam)