GLOBAL MARKETS-Dollar steadies before Fed, Europe slips on Greece

* European stocks drop for a second day as Greek worries

continue

* Greek bank stocks plunge 20 percent, bond yields spike

* Dollar steadies having dipped amid talk of more dovish Fed

* Record (LSE: REC.L - news) profits for Apple (NasdaqGS: AAPL - news) bolsters sentiment

* Oil slips after stock build up data

By Marc Jones

LONDON, Jan 28 (Reuters) - Stocks and the dollar retrenched

on Wednesday amid speculation the Federal Reserve will take a

dovish turn in its post-meeting statement later as signs emerge

that the greenback's strength is hurting company profits.

Worries that Greece's new government is heading for clashes

with the rest of the euro zone over its debts saw European

shares stumble for a second day as Greek bonds also

took another dive.

Gadget giant Apple had grabbed headlines overnight

after it reported the biggest quarterly profits in corporate

history, but focus was now squarely on what message the Fed

sends when it wraps up its first meeting of the year

later.

Wall Street was expected to see a steady start. The

dollar slipped against the euro, the yen and a

number of other key currencies in early European trading

before stabilising.

Scepticism is growing that the Fed will raise rates by

mid-year, as had been expected. Other major central banks are

easing aggressively and the strong dollar and slumping oil

prices are driving down inflation.

Big U.S. firms that sell abroad are also grumbling, with a

slew multinationals from Microsoft (NasdaqGS: MSFT - news) to Procter & Gamble

having warned their situation will get worse if the

greenback holds its strength.

"The question at the top of every market participant's mind

is whether the world's largest central bank will follow its

global counterparts into a more dovish policy lean," said John

Kicklighter, chief currency strategist at DailyFX.

Two-year U.S. Treasury yields -- the most sensitive to U.S.

rate hike expectations -- held above 0.50 percent in

Europe, having dipped on Tuesday following some

weaker-than-expected durable goods data and lacklustre corporate

earnings.

European government bonds, with the exception of safe-haven

Germany, saw their yields rise again as uncertainty about Greece

persists.

Greek Prime Minister Alexis Tsipras named a cabinet of

anti-austerity veterans on Tuesday and promptly halted the

privatisation of Greece's biggest port, signalling he intentions

to stick to his party's election pledges.

Shares (Berlin: DI6.BE - news) in Greece's main banks plunged

over 20 percent. Greek five-year bond yields ( GR5YT=TWEB) hit

their highest since the country's 2012 debt restructuring and

10-year yields shot back above 10 percent.

SINGAPORE SLING

It had all seemed brighter in Asia. MSCI (NYSE: MSCI - news) 's broadest index of

Asia-Pacific shares outside Japan ticked up 0.2

percent to a four-month high and Japan's Nikkei also

reached a one-month high.

As well as the sentiment boost of Apple's world record

profits, Singapore's central bank eased monetary policy

unexpectedly, its first unscheduled change in over a decade,

jumping in ahead of a planned meeting in April.

Singapore's central bank joins a growing list of

counterparts -- from Denmark and Canada to Turkey and India --

that have made surprise moves in what is looking increasingly

like a global currency war.

The Singapore dollar skidded to its weakest in nearly 4-1/2

years. Other emerging Asian currencies also weakened, including

Malaysia's ringgit and Thailand's baht, despite

their central banks keeping their rates on hold.

Rising bets that the U.S. Fed will push back a rate hike saw

emerging market shares consolidate their recent gains. Fed funds

rates are now pricing in only a slim chance rates will

rise before the end of the year.

"The market now thinks a rate hike around June is unlikely.

So if the Fed does not change its tone, the market will take it

as a bit more hawkish than expected," said Tomoaki Shishido,

fixed income analyst at Nomura Securities.

In commodity markets, oil prices were pressured by news U.S.

oil stockpiles surged by nearly 13 million barrels last week.

Brent crude oil dipped to $49.40 a barrel and U.S. crude

oil futures slipped to $45.57.

Safe-haven gold hovered at 1,290 an ounce while

copper, which has lost 25 percent in the last six

months, climbed 1 percent.

(Editing by Catherine Evans)