* Graphic: World FX rates in 2019 http://tmsnrt.rs/2egbfVh
By Saikat Chatterjee
LONDON, July 18 (Reuters) - The dollar slipped for a secondday against its rivals on Thursday on the back of softer U.S.Treasury yields after weak housing data as investors geared upfor a policy meeting next week where officials are set to cutinterest rates for the first time in a decade.
While expectations of a 25 basis point rate cut are firmlybaked into money markets, some investors are gunning for a 50basis point cut. The Fed is widely expected to cut a total bynearly 75 basis points by the end of the year.
"We are certainly seeing more concrete signals emerge fromboth the Fed and the ECB in terms of easing policy and only thequestion is how much will the Fed cut next week," said UlrichLeuchtmann, the head of currency research at Commerzbank.
Against a basket of its rivals, the dollar edged 0.1%lower to 97.09.
Morgan Stanley strategists said in a daily note that theoverall outlook for riskier assets remained bearish thanks todisappointing U.S. earnings reports and weak prospects forglobal trade.
"All this gives strong reason for the currentinternationally-focused Fed to consider cutting rates by 50 bpsat the end of the month," they said. A 50 basis point cut wouldweaken the dollar sharply, particularly against high-yieldingcurrencies, they said.
Despite the growing expectations of a U.S. interest ratecut, the euro has been hemmed in a narrow trading range inrecent days around the $1.12 level as investors expected theEuropean Central Bank to follow in the Fed's footsteps.
Money markets are currently assigning a 50% probability of a10 basis points rate cut next week at a scheduled meeting.
AUSSIE UP
The weakness in the dollar pushed other currencies higher.The Australian dollar led gainers thanks to a solid jobs report.
Australian employment rose by a surprisingly small 500positions in June, but all the weakness was in part-time workwith full-time jobs rising by 21,100. The unemployment rate heldsteady at 5.2% for a third month running.
The Aussie was 0.3% higher at $0.7031.
"The Australian dollar drew a significant part of itssupport from the June underemployment rate, which fell to 8.2%from 8.6%," said Masafumi Yamamoto, chief forex strategist atMizuho Securities in Tokyo.
He said the underemployment rate had a higher correlationwith policy rates and wages than the jobless rate and was likelyto attract more attention in the future.
(Reporting by Saikat Chatterjee; Editing by Kevin Liffey)