* For poll data click on
* US dollar to be best performer in first half
* Yen and euro to be worst performers
* Fed tapering to bolster dollar
Jan 8 (Reuters) - The U.S. dollar will strengthen over the first half of this year at the expense of a weaker yen and euro, as the recovery in the world's largest economy becomes entrenched, a Reuters poll found.
A firm majority of foreign exchange strategists in the latest monthly poll said the euro and yen will be among the worst-performing developed world currencies in the first six months of 2014.
Weak economic prospects will keep the now 18-country single currency subdued, while another likely flood of cash from Japan to negate the effects of an upcoming sales tax hike will pressure the safe-haven yen.
The poll, conducted this week, expects most of the most widely-traded currencies to continue weakening against the dollar, which has been bolstered by the U.S. Federal Reserve's decision in December to trim its monthly asset purchases from this month.
"Looking at positions that investors have, what we see is that while consensus is quite bullish, actually investors don't appear to have substantial long dollar positions," said Michael Sneyd, FX strategist at BNP Paribas.
"So, we think there is scope for investors to put those positions on and that will help support the currency."
The Reuters consensus plots the dollar index rising to 85.0 by the end of this year. It was trading earlier on Wednesday at around a one-month high just under 81, after data on Tuesday showed the smallest U.S. trade deficit in four years.
Minutes from the Fed's December meeting later on Wednesday and Friday's non-farm payrolls report will probably cement expectations that the Fed will continue to taper asset purchases after Janet Yellen takes over as head next month.
But a feeble recovery in the euro zone, coupled with the risk of deflation, will pressure the European Central Bank to keep policy loose and in turn, weaken the single currency.
"It is becoming much more likely the ECB is going to fail its inflation mandate and this we think is going to be driving the ECB to be much more aggressive with its policy decisions," said Sneyd.
Euro zone inflation tumbled to 0.8 percent in December, according to the flash estimate, well below the ECB's 2.0 percent ceiling.
The euro is expected to steadily weaken to $1.35 in a month, $1.30 in six and $1.27 by the end of the year, from $1.359 earlier on Wednesday. It is also expected to take a hit against sterling.
However, over the past few years leading currency watchers as a group have repeatedly called for the euro to weaken, only to see it rise against the dollar.
Strong demand for Ireland's first debt sale since exiting its EU/IMF bailout, as well as expectations that Greece may return to the bond markets later this year, are currently keeping a bid in the currency. European shares were trading near a 5-1/2 year high on Wednesday.
PAIN AHEAD FOR THE YEN
The yen, which fell by about a fifth last year is expected to slide further in 2014 on expectations the Fed will end its bond-purchase programme while the Bank of Japan (BOJ) maintains, or adds, to its massive stimulus package.
"The yen is expected to remain on offer throughout 2014," said Roberto Mialich, forex strategist at UniCredit in Milan, who was the most accurate forecaster last year and has been among the top five in all but one of the past six years.
The latest consensus is for the yen to trade at 104 per dollar in one month, 106 in six and 110 in a year.
The BOJ, which is still Japan's growth engine, will be pressured to provide additional stimulus to help the economy withstand an already approved sales-tax increase by Prime Minister Shinzo Abe's government, due this April.
"The BOJ will remain extremely accommodative this year. We think the BOJ will be extremely keen to offset any potential drawback to the economy through a weaker currency," said Mialich.
The consensus is in line with a separate Reuters poll of equity strategists taken last month, which showed a weaker yen is expected to help boost corporate earnings and drive Japan's Nikkei to double-digit gains this year.
Falls in the yen tend to boost sentiment towards Japanese equities because investors expect the weaker currency will lift companies' competitiveness abroad as well as their overseas earnings when funds are repatriated.
(Analysis and polling by Shaloo Shrivastava and Hari Kishan; Editing by Ross Finley and Susan Fenton)