* Graphic: World FX rates tmsnrt.rs/2RBWI5E LONDON, Nov 1 (Reuters) - The U.S. dollar drifted lower on Monday after posting its biggest daily rise in more than four months last week as hedge funds cut back bearish bets before a U.S. Federal Reserve policy meeting this week. Monetary policy in the United States, Australia and the United Kingdom is in sharp focus this week, with the Federal Reserve widely expected to announce a tapering of stimulus, a factor that has lifted the greenback in recent weeks. But quickening inflation data has prompted some investment banks such as Goldman Sachs to advance their expectations of a rate hike by the Fed as early as July 2022, compared with the third quarter of 2023 previously. Hedge fund manager Stephen Jen of Eurizon SLJ Capital said in a note to clients said FX markets seem too hawkish on the ECB and too dovish on the Fed. “With a large overhang of long euro positions among the real money community, I believe the euro will remain vulnerable in the months and quarters ahead against the dollar,” he said. The euro edged higher at $1.1575, staying close to Friday’s intra-day low of $1.1535, its weakest since Oct. 13, giving up most of its post ECB policy gains. The dollar index, which measures the U.S. currency against six rivals, was a shade lower at 94.07, hovering close to Friday’s peak of 94.302, a level not seen since Oct. 13. It jumped 0.8% on Friday, its biggest single-day spike since mid-June after a 4.4% surge in the government’s index of core personal consumption expenditures - the Fed’s preferred inflation measure - solidified market expectations for a rates lift-off around the middle of next year. Money markets now assign a 50% probability of a 25 basis point rate hike by the Fed by next June, compared with only 15% a month earlier, according to CME futures data. The Reserve Bank of Australia will also decide policy on Tuesday, with markets challenging the central bank’s contention that rates won’t rise until 2024. The Aussie dollar slipped 0.1% to $0.7513, continuing its retreat from a nearly four-month high of $0.75555 reached last week. Reporting by Saikat Chatterjee; Additional reporting by Kevin Buckland; Editing by Rashmi Aich and Andrew Heavens