SINGAPORE, May 3 Reuters The dollar eased on Wednesday, with investors expecting a hike in U.S. interest rates later in the day, but unsure how long the Federal Reserve will keep policy tight considering the latest gloomy jobs data and U.S. debt ceiling and banking sector risks.

U.S. job openings fell for a third straight month in March and layoffs increased to the highest in more than two years, data showed on Tuesday, offering some hope that the softening in the labour market could aid the Fed39;s fight against inflation.

The dollar index , which measures the U.S. currency against six rivals, fell 0.128 to 101.710, after sliding 0.245 on Tuesday.

The Fed is widely expected to raise interest rates by 25 basis points when it concludes a twoday meeting on Wednesday and investor focus will be on whether the Fed hints at a pause or further tightening.

Bank of Singapore currency strategist Moh Siong Sim said markets are expecting rate cuts towards the end of the year due to the stress in the U.S. banking system. But, Moh reckoned the Fed might seek to downplay the prospect for lower rates as data is showing that while the U.S. economy is slowing, it is not slowing fast enough to bring inflation back to the 2 target.

The Fed39;s meeting comes as U.S financial markets are reeling from the weekend failure of San Franciscobased First Republic Bank as well as worries that the government could run out of cash after June 1 without a debt ceiling hike.

The yield on 10year…