FOREX-Euro stabilises as investors welcome Fed buying corporate bonds

* Euro gained 2% so far this month

* Dollar stable versus safe-haven Japanese yen

* Graphic: World FX rates in 2019 (Recasts, adds new chart and comment and German ZEW survey)

LONDON, June 16 (Reuters) - The euro was little changed against the U.S. dollar on Tuesday as the U.S. Federal Reserve prepared to start its corporate bond-buying scheme, while a report flagging the possibility of more fiscal stimulus shored up investor confidence.

The U.S. dollar had slipped and riskier currencies rallied during Asian sessions, but after European traders joined the market, most major currencies stabilised, all trading broadly neutral.

Still, after a 2% rise so far this month, the euro was close to near $1.15, this year’s high.

The Fed said it would start buying corporate debt on Tuesday as part of an already announced stimulus scheme, and launched its Main Street Lending Program for businesses.

“We’re unfortunately still in this environment where there is still a great deal of uncertainty so when we have episodes where central banks are being seen to be either adding liquidity or supporting the markets as the Fed did in that particular regard, that provides impetus for a risk recovery,” said Jeremy Stretch, head of G10 FX strategy at CIBS Capital Markets.

Investor sentiment was further supported by a Bloomberg News report that President Donald Trump’s administration was considering a nearly $1 trillion infrastructure programme to boost the economy, citing anonymous sources.

Taken together, the news reinforced a belief authorities will do what it takes to get the world’s biggest economy back on track.

Fed Chairman Jerome Powell is due to testify before the Senate Banking Committee on Tuesday. He will deliver the same testimony on Wednesday before the House Financial Services Committee.

Investors will be listening for hints the Fed is willing to do more.

“If so, equities and risk-linked currencies are likely to continue their journey north, as investors keep diverting their capital out of safe havens, the likes of the U.S. dollar, the yen and the franc,” said Charalambos Pissouros, senior market analyst at JFD Group.

The euro was flat at $1.1316, recovering from falls a couple of days back after traders feared a second wave of coronavirus and decided to cash in on any gains.

Beijing banned some people from leaving the Chinese capital and halted transportation services on Tuesday to try to contain a fresh coronavirus outbreak.

Global cases of the novel coronavirus have reached over 8 million. Deaths stand at over 434,000 and have doubled in seven weeks.

The dollar/yen was neutral at 107.28.

The Bank of Japan kept monetary settings steady on Tuesday and stuck to its view the economy will gradually recover from the coronavirus pandemic, signalling it has taken enough steps to support growth for now.

Market participants are awaiting the U.S. retail sales and industrial production due later in the day.

German investor sentiment rose more than expected in June on hopes that the worst of a sharp downturn in Europe’s largest economy prompted by the coronavirus pandemic will be over by the summer, a survey showed on Tuesday, but this has not had any impact on the common currency.

Reporting by Olga Cotaga; Editing by Barbara Lewis and Andrew Cawthorne