LONDON, Dec 9 Reuters The dollar was broadly flat against major currencies on Friday as jitters reemerged about the health of the U.S. economy, and ahead of producer inflation data later in the day and a Federal Reserve meeting on interest rates next week.

After a spell of relatively scarce marketmoving news, investors are looking towards a slew of rate decisions by central banks next week including the Fed, the European Central Bank and the Bank of England.

Markets are betting that all three will scale back the pace of their rate hikes, with 0.5 percentage point increases across the board, as policy makers continue to tap the brakes on growth through higher rates to thwart stubbornly high inflation.

Volatility levels for major currencies have retreated towards their longrun average, currency analysts at MUFG said in a note, as markets start to price in the prospect of peak interest rates early next year.

Part of the decline in volatility we would put down to market pricing indicating most central banks are approaching terminal rates suggesting Q1 will be the quarter when most central banks will pause after roughly 12 months of tightening, the note said.

U.S. data on producer price inflation due at 1330 GMT will be closelywatched for signs as to whether price rises are cooling, with consumer price data set to follow on Tuesday.

Data on Thursday showed a moderate increase in U.S. jobless claims, adding to investor nerves about the outlook.

The dollar index which…