The dollar slipped against most major currencies on Monday, reversing some recent strong gains ahead of an expected U.S. interest rate cut by the Federal Reserve this week.

Markets are fully pricing in a 25 basis point easing from 4.50 percent from the Fed when it meets on Tuesday, but chances of a bigger move have fallen to one-in-five from around 50-50 a week ago.

The environment is still bearish for the U.S. dollar. We do have the Fed meeting tomorrow and while they cut by 25 basis points the last time, they left a lingering impression that they will continue cutting rates until they see a reason to stop, said David Watt, senior currency strategist at RBC Capital Markets in Toronto.

By contrast, the ECB (European Central Bank) has fairly laid out that they're not turning dovish any time soon. Overall, the dollar has had its run and now it's running on fumes, he added.

In early New York trading, the euro was up 0.4 percent at $1.4717. It got a boost last week as comments by ECB President Jean-Claude Trichet left open the possibility of higher rates next year, and added to those gains on Friday despite a fairly solid U.S. payrolls number.

The dollar fell 0.3 percent against the Swiss franc to 1.1250 francs, while sterling rose 0.7 percent to $2.0452.

Against the yen, the dollar was flat at 111.69. Earlier it hit a one-month high around 111.88 yen, according to Reuters data, but came back down after a $10 billion subprime writedown by Swiss Bank UBS fanned concerns about the health of the global financial sector.

Nonetheless, the dollar remained on a relatively firm footing -- about four yen above last month's 2-1/2 year lows of 107.20 -- after stronger-than-expected U.S. jobs data on Friday dampened expectations of a 50 basis point U.S. rate cut.

The euro was up around half a percent at 164.39 yen.

U.S. pending home sales for October are scheduled for release at 10 a.m. EST, arguably the last piece of potentially market-moving data ahead of the Fed decision.

Concerns about the outlook for U.S. consumption ... may gain momentum today as pending home sales are expected to illustrate the dire state of the U.S. housing market, Commerzbank Corporates & Markets said in a research note.

However, with the possibility of further short-dollar position unwinding into year-end, it may be too early to call for a rise back toward the (euro's) recent all-time high.

The dollar in recent session had recovered against other major currencies as central banks in Canada and Britain have followed the Fed in cutting rates, while a U.S. government plan to limit potential mortgage defaults has stirred hopes that the economy's downturn will be contained.

(Editing by Tom Hals)

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