SINGAPORELONDON, Feb 2 Reuters The euro sat at a 10month high against the dollar on Thursday, ahead of a European Central Bank meeting at which markets expect a halfpercentage point rate increase, a day after the U.S. Federal Reserve slowed the pace of its rises to 25 basis points.

The Fed also said it had turned a corner in the fight against inflation, its first explicit acknowledgment that price increases are slowing, underpinning market expectations that the end of the central bank39;s raterise campaign is near and cuts could follow.

The dollar39;s most dramatic overnight dive came after Fed Chair Jerome Powell told a post meeting news conference that the disinflationary process has started, although he also signalled that interest rates would continue rising and that cuts were not in the offing.

It was very much a sort of relief … that there was nothing there to really seriously challenge the market39;s prevailing view, said Ray Attrill, head of FX strategy at National Australia Bank NAB.

Powell said that rates are going to have to be restrictive for some time, but that doesn39;t dissuade the market from saying some time might be six months, rather than two years.

The Bank of England also meets on Thursday, with its rate decision due at 1200 GMT before the ECB39;s at 1315 GMT. Markets also expect a halfpoint increase from the British central bank.

Sterling , which rose 0.47 on Wednesday, held at 1.236, and the dollar slid against the Japanese yen , dropping…