CORRECTED-FOREX-Dollar wobbles as traders eye series of Fed rate cuts

By Kevin Buckland

TOKYO, Sept 16 (Reuters) - The dollar sank to a 2-1/2-month low against the euro and a 10-month trough versus the risk-sensitive Aussie on Tuesday as investors cemented bets for a Federal Reserve interest rate cut this week and more to follow.

The greenback eased to a more than two-month low on the British pound with U.S. President Donald Trump renewing calls for aggressive monetary easing.

Markets see a rate reduction of at least 25 basis points on Wednesday as a certainty, with a small chance of a super-sized 50 basis-point cut. A total of 67 basis points of reductions are seen over the rest of this year, rising to 81 basis points by end-January.

The U.S. dollar index =USD, which tracks the currency against a basket of six major rivals, fell to 97.161, its lowest since July 24.

Trump in a social media post on Monday called on Fed Chair Jerome Powell to enact a "bigger" cut to benchmark interest rates in a social media post, pointing to the housing market.

Rapidly softening labour market data has been the key driver of the ramp-up in easing bets in recent weeks, resulting in a lower dollar and bond yields while pushing up equity prices, with Wall Street setting new records on Monday.

There is an "increasing view that the Fed is behind the curve and needing to ramp up the urgency to take rates to neutral," said Chris Weston, head of research at Pepperstone.

"The weight of capital is moving ever closer to a consensus position that the Fed cut rates not only in the September meeting, but also in October and December, and possibly in January too."

The euro EUR=EBS rose as much as 0.23% to $1.1787, a level not seen since July 24, ahead of the release of Germany ZEW surveys and Italian consumer inflation data.

Sterling GBP=D3 gained as much as 0.19% to $1.3624 for the first time since July 8, with British employment data due on Tuesday, ahead of the Bank of England's policy announcement on Thursday, where no change is expected.

The Australian dollar AUD=D3 edged as high as $0.6677, its strongest level since November 8, with Asian equity markets generally tracking Wall Street's overnight gains.

The dollar slipped 0.3% to 146.975 yen JPY=EBS. The Bank of Japan sets policy this Friday, with economists widely expecting the central bank to forgo a rate hike this time.

Several hopefuls threw their hats in the ring on Tuesday to be Japan's next prime minister, including popular Farm Minister Shinjiro Koizumi and Chief Cabinet Secretary Yoshimasa Hayashi.