FOREX-Dollar slips to one-month lows as Fed's views disappoint

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* Graphic: World FX rates in 2018 http://tmsnrt.rs/2egbfVh

By Saikat Chatterjee

LONDON, March 22 (Reuters) - The dollar dropped to aone-month low against a basket of currencies on Thursday afterthe Federal Reserve issued a forecast for future policy that wasless hawkish than expected.

Escalating rhetoric on trade also put pressure on thedollar. China accused the United States of "repeatedly abusing"trade practices as it braced for U.S. tariffs worth as much as$60 billion on Chinese imports, which were due to be announcedon Thursday urn:newsml:reuters.com:*:nL3N1R41MQ.

"If the risk of a trade war outbreak escalates, the euro andthe yen might hold its own against the dollar, but some of theemerging market currencies will come under pressure," said AlvinTan, a currency strategist at Societe Generale in London.

The dollar index .DXY fell 0.3 percent to 89.396, itslowest level since Feb. 20. It fell 0.65 percent on Wednesday,its second-biggest daily drop so far this year.

Its losses were more pronounced against the Japanese yenagainst which it was down 0.3 percent at 105.74 yenJPY=EBS

"The Fed hiking rates three times, and even four times, thisyear won't be too big of a surprise for the currency market,which fully expects the Fed to continue normalising policy,"said Shin Kadota, senior strategist at Barclays in Tokyo.

"On the other hand, there is still room for the market toprice in other central banks normalising policy. The dollarneeds a big surprise to be jolted higher, something the Fedmeeting did not provide," Kadota said.

A Bank of England meeting later on Thursday is now in focus,with market participants keeping a close eye on the centralbank's policy views, after robust British wage data cementedexpectations that the central bank will raise rates as early asMay urn:newsml:reuters.com:*:nL8N1R32AS.

The pound GBP=D3 extended its overnight rise and rose to anear seven-week high of $1.4171. (Reporting by Saikat Chatterjee; additional reporting byShinichi Saoshiro in Tokyo; editing by Larry King) ((saikat.chatterjee@thomsonreuters.com; +44-20-7542-1713;Reuters Messaging: saikat.chatterjee.reuters.com@reuters.net))

Referenced Symbols:EFX,

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