RPT-GLOBAL MARKETS-Euro slips as rate cut seen, stocks falter

                                
 * Euro, sterling dip ahead of ECB, BOE meetings
                                
 * Most Asia stocks lose ground as China hope; Nikkei up 2
pct
                                
 * Caution lingers; gold recovers from recent falls
                                
 * Oil prices dip, paring rally in previous session
 (Repeats to more subscribers; updates with latest prices,
European pre-open)
                                
 By Rafael Nam
                                
 HONG KONG, March 5 (Reuters) - The euro and sterling
slipped on Thursday ahead of expected rate cuts in Europe and
the UK, while most Asian stock markets gave up early gains on
disappointment that China did not announce new stimulus plans.
                                
 European shares were set to drop as well following a rally
in markets worldwide on Wednesday sparked by speculation that
China was about to announce more stimulus spending, adding to a
4 trillion yuan ($585 million) plan unveiled in November.
                                
 Gloomy economic news continued to push some investors to
perceived havens such as gold, while oil prices eased after a
near 9 percent rally overnight spurred by an unexpected drop in
U.S. crude oil inventories.
                                
 The European Central Bank was expected to cut interest
rates to an all-time low later in the day and slash its 2009
and 2010 economic forecasts to reflect the rapid pace of
deterioration in the euro zone. [ID:nL4897767]
                                
 The Bank of England also looked set to cut interest rates,
and was expected to announce it will start boosting money
supply to drag Britain out of recession. [ID:nL4370756]
                                
 The European single currency fell 0.6 percent from late
U.S. trade to $1.2588 <EUR=> ahead of the ECB decision, which
is expected at 1245 GMT, and slipped 0.4 percent against the
yen to 125.00 yen <EURJPY=R>.
                                
 Sterling fell 0.4 percent to $1.4140 <GBP=D4>. The BoE's
rate decision is expected at around 1200 GMT.
                                
 The MSCI index for Asia-Pacific stocks outside Japan
<.MIAPJ0000PUS> was down 0.1 percent as of 0730 GMT, after
gaining about 2 percent over the previous two sessions.
                                
 China's Premier Wen Jiabao vowed to parliament on Thursday
that the government would ramp up spending to hit its 8 percent
growth target this year, but did not announce the more concrete
spending messages that markets had craved for. [ID:nSP392276]
                                
 "They certainly didn't announce the stimulus package that
everyone was looking for," said Juliette Saly, market analyst
at Commonwealth Securities in Australia.
                                
 "The encouraging news though is that they are saying they
will increase spending so that should counter the economic
slowdown." Saly added.
                                
 Shanghai stocks <.SSEC>, which had surged 6.1 percent on
Wednesday on hopes of more government stimulus, ended up 1
percent on Thursday but off the day's highs, while Taiwan rose
2.1 percent and Hong Kong's Hang Seng <.HSI> fell 0.8 percent.
                                
 But Japan's Nikkei average <.N225> surged 2 percent on
hopes that tentative signs of a rebound in China would boost
earnings for exporters of construction machines and shipping
firms.
                                
 Regardless of China's policy path, investors' nerves remain
frayed by the volatile mix of a weakening global economy and
doubts about the stability of the financial system.
                                
 Reports on Wednesday showed U.S. employers cut nearly
700,000 jobs in February and the U.S. service sector slump
deepened. [ID:nN04538530]
                                
 Elsewhere, Japanese firms' capital spending tumbled 17.3
percent in October-December from the same period a year
earlier, while the euro zone's dominant service sector sank
still deeper into recession during February. [ID:nT337764] and
[ID:nL462612]
                                
 FOCUS ON ECB, BOE
                                
 With the ECB widely tipped to cut interest rates by half a
percentage point to 1.5 percent, investors will be looking for
clues on where the central bank's rate floor lies, as euro zone
policy makers seem reluctant to follow the U.S Federal Reserve
and the Bank of Japan in going towards zero.
                                
 The BoE is also expected to cut interest rates by half a
percentage point to a record low of 0.5 percent.
                                
 Against the yen, the dollar rose 0.3 percent to 99.54
<JPY=>, its highest in four months, before settling back at
99.41.
                                
 In commodity markets, oil prices <CLc1> lost 40 cents to
$44.98 a barrel, paring a near 9 percent rally in the prior
session that had been spurred by an unexpected drop in U.S.
crude stocks and an increase in gasoline demand.
                                
 Though some assets seen as safer in volatile times have
ceded ground recently, investors have yet to exit these
positions in big numbers as gloomy economic news continues to
flood in.
                                
 Spot gold <XAU=> gained about $6 to $912.60 an ounce,
recovering after prices for the precious metal had fallen in
the eight previous sessions to hit a three-week low on
Wednesday.