TOKYO (AFX-ASIA) - The dollar was firmer ahead of the rate-setting US Federal Open Market Committee meeting tonight, with speculators cutting their long-euro and yen positions, dealers said. "The market is waiting for the FOMC. Short-term players had been selling the dollar/yen and are now making position adjustments," ABN Amro foreign exchange manager Toshihiko Masaki said. Most expect the Fed to cut rates by 25 basis points, though there is some speculation of a larger easing and this may lead to disappointment when the news breaks, he said. "Some people will be disappointed by a 25 basis point cut but even if the Fed cuts 50 points it may show the Fed is worried about the economy," Masaki said. Meanwhile, the euro's recent sharp gains, which helped drive the dollar lower, have stalled, with the market needing time to digest the build-up in speculative euro-long positions, he said. "There is some real money buying euro but the short-term speculators have been buying constantly, the same as what happened earlier this year, and the IMM report shows the market's gone long on the euro by a good amount," Masaki said. The Chicago Mercantile Exchange's IMM data give details of net currency positions. "We have to see a correction before we go higher. Before the euro recovers the 95 cents we will see a (technical) Fibonnaci retracement to 88-89 cents," Masaki said. "Tonight's FOMC may be a signal for the position adjustment but the ECB meeting at the end of August may be a turning point for the next euro rally," he added. "The eurozone balance of payments is still negative but this is decreasing from last year so the euro will not go down far," he said, noting that the US needs a constant capital inflow to feed its large current account deficit. On the yen, investors are concerned that equity declines will increase latent losses at listed companies, which have to report interim results under mark-to-market rules for the first time this year. "There may be some corporate bankruptcies. There may be some companies in trouble," Masaki said.