NAIROBI, July 22 (Reuters) - The Kenyan shilling was steady against the dollar on Friday as profit taking offset early gains triggered by improving risk appetite and a rise in the euro after euro zone leaders announced a new bailout for Greece. The euro rallied on Thursday on news that Europe would create a fund to make cheap loans to Greece and other heavily indebted governments in the euro zone. At 0712 GMT, commercial banks quoted the shilling at 89.90/90.00, Thursday's closing level. It had touched 89.75/85 in early trade. "There was some gain on the shilling at the open on the back of a stronger euro and other offshore currencies after details of the Greece bailout came out," said Dickson Magecha, a trader at Standard Chartered Bank. "The shilling lost some of the gains on profit taking." Typically, when the euro strengthens against the dollar, it boosts the shilling as risk appetite improves, encouraging investors to buy into emerging market assets. Traders said they expected the shilling to trade in the 89.50-90.50 range on Friday. "Going forward, we expect the shilling to remain hemmed within a tight range as the market remains evenly balanced," Bank of Africa said in a daily report to clients. "However, continued strong gains in the euro internationally could support the shilling."

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