* Fed rate rise on Wednesday more than 90 pct priced-in
* Euro retreats as Netherlands votes
* Sterling rebounds after plumbing two-month lows
* Graphic: World FX rates in 2017 tmsnrt.rs/2egbfVh
By Ritvik Carvalho
LONDON, March 15 (Reuters) - The dollar was subdued in European trade on Wednesday, staying range-bound ahead of an expected U.S. Federal Reserve interest rate hike with investors’ eyes peeled for clues on the bank’s future monetary policy.
Fed fund futures price in a more than a 90 percent chance of a rise in rates on Wednesday, and attention is now focused on whether the U.S. central bank is now on course for regular three-monthly rises in the months and years ahead.
“The 25 basis point hike is fully priced in, so that’s not even going to be a factor...it’s more what the Fed’s path is going to be going forward,” said Societe Generale currency strategist Alvin Tan in London.
“We’re thinking the 2017 dots indicating three hikes in total is unlikely to be changed. But there’s a good chance that the rate path for 2018 and 2019 could be raised slightly higher, in terms of the median dot path.”
Against the yen, the greenback edged 0.1 percent lower to 114.65, remaining shy of last week’s peak of 115.51, its highest level since Jan. 19 as expectations built for the rate increase.
“I think the dollar might have trouble above the 115 level today, with Japanese exporters still seeking to sell above it ahead of the end of the Japanese fiscal year this month,” said Kaneo Ogino, director at foreign exchange research firm Global-info Co in Tokyo.
U.S. producer prices rose more than expected last month, marking the most robust year-on-year gain in nearly five years.
The Bank of Japan also began a two-day monetary policy meeting on Wednesday. It is expected to hold its policy steady and stress that inflation is nowhere near levels that justify talk of withdrawing its massive stimulus.
Sterling jumped to a week’s high of $1.2258 in early trade in Europe, rebounding from the previous day’s eight-week low hit on worries of a painful and prolonged Brexit process. It was last up just over half a percent on the day at $1.2230.
British Prime Minister Theresa May won parliamentary backing on Monday to begin the process of leaving the EU and start two years of talks that will shape the future of Britain and Europe, as Scotland mulled a possible second independence referendum.
The euro edged up 0.3 percent to $1.0631. It remained below its Monday high of $1.0714, as concerns about Wednesday’s Dutch parliamentary election offset market speculation that the European Central Bank could be poised to wind down its stimulus programme.
The Dutch vote, taking place amid a diplomatic row between the Netherlands and Turkey, is being closed watched as a test of populist and anti-immigrant sentiment in Europe ahead of further elections in France next month and in Germany in September.
The dollar index, which tracks the greenback against a basket of six rival currencies, was off 0.2 percent, at 101.50 .
Reporting by Ritvik Carvalho; Additional reporting by Tokyo markets team; Editing by Mark Trevelyan