FOREX-Euro steadies vs dollar, yen; SNB awaited

* Euro steadies vs dlr, yen; China tightening concerns ease

* SNB policy decision eyed; EUR/CHF earlier hit 1-month low

* Aussie recovers; NZ dollar falls after RBNZ

(Updates prices, adds quotes)

By Jessica Mortimer

LONDON, March 11 (Reuters) - The euro steadied against the dollar and the yen in quiet trade on Thursday, recovering from earlier falls after strong Chinese data fuelled expectations of possible further monetary tightening by Beijing.

Chinese inflation rose to a 16-month high and other economic data showed broad-based strength, boosting safe-haven flows into the yen and dollar against the euro and perceived riskier assets. [ID:nTOE6290B5]

The yen's rally later fizzled out, however, as the market took the view that the economic recovery in China remained broadly on track to drive global growth.

"There was a bit of a risk aversion move earlier, with the dollar and the yen performing better due to the possibility of more tightening in China, but it's not really a durable trade," said Tom Levinson, currency strategist at ING in London.

"The market likes to see China acting in a responsible way to safeguard its long-term growth potential," he said.

Gains in the yen were also limited after sources familiar with the Bank of Japan's thinking told Reuters the central bank may ease monetary policy as early as next week. [ID:nTOE6290C0]

At 1131 GMT, the euro was steady at 123.64 yen , off an earlier low near 123.00. Against the dollar the euro was flat at $1.3658.

The dollar was steady at 90.46 yen, having climbed as far as 90.83 on trading platform EBS on Wednesday, its highest in two weeks.

"As long as any measures out of China are implemented in a gradual manner then it is more likely to be a positive for risk appetite as Chinese growth is still healthy," said Carl Hammer, currency strategist at SEB in Stockholm.

SNB EYED

The euro was steady against the Swiss franc at 1.4608 francs after earlier falling to a one-month low around 1.4597 as market players awaited a Swiss National Bank policy decision at 1300 GMT.

The SNB is expected to keep interest rates very low and maintain its policy of foreign exchange intervention to curb any excessive appreciation in the Swiss currency and aid Switzerland's nascent economic recovery. [SNB/INT]

Analysts said many expect the SNB to tone down its rhetoric on intervention, but traders were also wary that the central bank may be ready to step in if the Swiss franc appreciates too much as a result.

This kept the euro steady against the Swiss franc, with traders reporting good demand for euro/Swiss franc options ahead of the SNB's policy assessment.

"We do not rule out some watering down of the interventionist language, which would likely be interpreted by the market as a form of guarded approval for further EUR/CHF downside," UBS analysts said in a note. <^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^

For a graphic on moves in euro/Swiss franc on previous intervention rumours see:

http://graphics.thomsonreuters.com/310/CH_SNB0310.gif ^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^>

The Australian dollar rose 0.1 percent against the dollar to $0.9156, cutting earlier losses made after the strong Chinese data and on data showing a smaller-than-expected rise in Australian employment.

The New Zealand dollar fell 0.1 percent to $0.7005 after the central bank said there was no urgency to lift interest rates off their current record lows. [ID:nSGE62702P] [ID:nWEL003980]

(Additional reporting by Scott Barber and by Satomi Noguchi in Tokyo, editing by Nigel Stephenson)