RTRS:Euro rally loses steam as focus turns from Greece to data
By Ian Chua and Antoni Slodkowski
TOKYO/SYDNEY (Reuters) - The euro's advance against the dollar lost momentum on Friday after a rally this week as the market focus shifted to upcoming economic data, with Greece looking set to secure emergency funds and avert imminent default.
The single currency, however, was supported by buying from Asian central banks after early rounds of profit-taking had pushed it down to an Asian session low of $1.4467, Tokyo bank dealers said.
Investors broadly covered short positions in the dollar and locked in profits on outperforming commodity currencies such as the Australian and New Zealand dollars after China's purchasing managers' index came in slightly below expectations at 50.9.
The euro was also well-supported against the yen and the Aussie with traders saying the market was starting to rebuild longs ahead of Thursday's European Central Bank monetary policy meeting.
Investors will focus on a news conference by ECB President Jean-Claude Trichet following the meeting, during which it is expected to raise interest rates again, with data earlier this week showing inflation in June having stabilised well above the bank's target.
"A possible rate hike is already priced in and investors will now look for suggestions of any potential further hikes," said Sumino Kamei, a senior currency analyst at the Bank of Tokyo-Mitsubishi UFJ.
"If such clues are not provided, the euro ... may be sold off even more aggressively," said Kamei. It would probably come under some short-term pressure anyway, because people would try to "sell the fact," she said.
The euro traded at $1.4514, up 0.1 percent from $1.4504 late in New York, where it peaked near $1.4539, a level not seen since June 10.
