* New Fed chief with dovish history testifies in Congress
* Markets in tight ranges, no impact of immigration vote on Swiss franc
* Disappointing U.S. jobs data fails to deter Fed taper expectations
* Bank of England has chance to tweak guidance on Wednesday
By Patrick Graham
LONDON, Feb 10 (Reuters) - Major currency markets held broadly steady on Monday ahead of what may prove an important week for expectations on the timing of central bank policy moves in Britain and the United States over the next year.
There was little sign of a reaction of the Swiss franc to Switzerland’s vote to reintroduce immigration controls with the European Union.
The new head of the U.S. Federal Reserve, Janet Yellen, testifies in Congress after a second month of softer jobs figures which most investors for now seem to be putting down to the weather rather than any weakening of economic recovery.
Yellen, long a supporter of the Fed’s ultra-loose policy approach, must walk a line between maintaining enough support for the recovery and not spooking markets convinced the U.S. central bank will cease buying bonds by the end of this year.
That “tapering” is behind this year’s main trend so far - a flood of money out of emerging economies that is returning to the developed world and supporting the euro, dollar and yen among others.
But that flow, possibly allied to the doubts over the pace of the U.S. recovery, has helped hold off the surge for the dollar that many have forecast and kept major currencies in tight ranges over recent weeks.
“Yellen likely will signal the Fed’s intention to continue tapering, without sounding especially alarmed about the softer payroll reports of the past two months,” analysts from French bank BNP Paribas said in a morning note.
“We remain constructive on the USD, but recognise that it may struggle to regain momentum in the immediate future.”
The yen, traditionally a safe haven for investors at times of economic stress, has been among the biggest winners from the emerging sell-off, halting a slide which had seen it top 105 yen per dollar.
On Monday it touched its lowest more than a week before stabilising around 102.10.
“Last week’s data was not particularly helpful for the dollar and this week’s data calendar does not look like it will be strong enough to re-invigorate the dollar bull trend,” Dutch bank ING said in a morning report.
In Britain, an inflation report on Wednesday gives BoE Governor Mark Carney another chance to convince markets the bank’s forecasts for a hold in interest rates well into next year are credible.
Analysts are still split on whether Carney will formally tweak the bank’s forward guidance on policy and whether it will work in pushing back market expectations for the timing of a first rise in rates from the start of next year.
“There appears scope for UK short rates to decline and this is something that can also weigh on sterling,” RBS strategist Paul Robson said. “However, we do not expect much follow-through.”
Speculators raised dollar bets in the week through Feb. 4 after paring them last week to the lowest in more than two months, according to data from the Commodity Futures Trading Commission released on Friday. It was the 14th straight long position for the dollar.
Still, the poorer U.S. data, allied to the absence of expected dovish signs on policy from last week’s European Central Bank meeting, have supported the euro, trading around $1.3640 early in Europe.
Traders cited a central bank buying dollars at $1.3650.
“The payrolls numbers triggered another small short squeeze in EUR/USD,” ING said.
“It could be another difficult week for those with short euro positions. Certainly a break above 1.3650 would be worrying and open up the 1.3720 area.”