By Tom Westbrook

SINGAPORE (Reuters) - The dollar slipped against other major currencies for a third straight day on Tuesday, tempering a long rally as investors cashed out and trimmed bets on U.S. interest rate rises driving further gains.

The Chinese yuan also steadied after a steep slide that has taken it more than 6% lower in a month. It last traded at 6.7795 per dollar. The euro rose marginally to $1.0442 and the Antipodean currencies each rose about 0.5%.

The dollar's breather has set the dollar index back to 104.169, about 0.8% beneath last week's two-decade high of 105.010.

"We're shifting from an inflation story to a growth story," John Briggs, global head strategy at NatWest Markets, told reporters in Singapore.

He still thinks the dollar will continue to find support as the driver of gains shifts. But it has been becalmed lately in the absence of new reasons to expect sharp rate hikes and longer-end U.S. yields have fallen on fears of a recession.

"Even if it's in a downward growth trajectory...U.S. is probably still going to outperform," Briggs said. "It's kind of like the prettiest horse in the glue factory."

The dollar remains above parity versus the Swiss franc and on the front foot in Asia's emerging markets, where rising food prices are seen putting pressure on regional economies.

The greenback made a fresh record high on the Indian rupee on Tuesday and hit its highest since 2020 on Indonesia's rupiah.

China's yuan, however, has finally caught a footing as Shanghai edges closer to emerging from lockdown.

Shanghai logged three consecutive days with no new COVID-19 cases outside quarantine zones on Tuesday, a milestone that in other cities has signalled the beginning of lifting restrictions.

"Dollar/(yuan) has been a big driver of G10 currencies," said Chris Weston, head of research at brokerage Pepperstone in Melbourne.

He added that a pause in its slide as well as a calming of markets' volatility generally has paused dollar gains, for now.

RATE EXPECTATIONS

Appearances from a handful of Federal Reserve speakers on Tuesday, including Chairman Jerome Powell at 1800 GMT, will be closely watched for any clues about whether near-term rate expectations could become even more aggressive.

Futures markets are priced for consecutive 50 basis point hikes in June and July and for the benchmark U.S. interest rate to reach 2.75% by year's end. However there are growing expectations that other central banks will catch up.

The gap between 10-year German and U.S. real yields has narrowed by more than 30 basis points this month and central banks in Britain and Australia have raised rates.

Australia's central bank considered a sharper rise in interest rates at its May, minutes published on Tuesday showed in a heavy hint it will hike again in June.

The Australian dollar has bounced more than 2.5% from a two-year low it made last week and was back above 70 cents on Tuesday at $0.7002. The New Zealand dollar has gained about 2% at the same time and last bought $0.6333.

The Aussie could get a further boost from interest rate expectations if wages data beats expectations on Wednesday.

"We think an upward surprise of 1% quarter/quarter growth in tomorrow's wage price index could be enough to get the Reserve Bank of Australia over the line for (a) 40 basis point (hike)," analysts at ANZ Bank said in a note.

Sterling has bounced about 1.5% from a two-year low and crept higher to $1.2341 on Tuesday. The yen was at 129.37 per dollar, holding above a two-decade trough.