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FOREX-Dollar dips vs yen; eyes equities, investor flows

Published 08/13/2009, 08:59 PM
Updated 08/13/2009, 09:03 PM

* Yen takes cues from equities, eyes on Chinese shares

* Focus on potential for some Japanese fund repatriation * Some $27 bln in Treasuries coupon payments due on Aug. 15.

* Aussie hits 11-mth high vs dollar after RBA comments

By Masayuki Kitano

TOKYO, Aug 14 (Reuters) - The dollar dipped against the yen on Friday, but trimmed some initial losses as the yen fell against higher-yielding currencies due to a rise in equities and a surge in the Australian dollar.

The euro held steady against the dollar after rising the previous day on data showing that Germany and France unexpectedly returned to growth in the second quarter of the year.

Such news contrasted with Thursday's disappointing U.S. retail sales data for July, which cast a shadow over an anticipated consumer rebound.

The euro was steady at $1.4296.

The dollar was 0.1 percent lower against the yen compared to late U.S. trading on Thursday at 95.42 yen, after dipping to as low as around 95.25 yen earlier in the day.

The greenback remains well off a peak of 97.79 yen hit on trading platform EBS late last week following better-than- expected U.S. jobs data.

"It seems like the mood seen late last week, after the U.S. jobs data, of seeing the dollar in a favourable light, may be fading," said a trader for a Japanese trust bank.

Gains in the dollar against the yen could be limited in the near-term, due to the potential for fund repatriation by Japanese investors related to $27 billion in coupon payments on U.S. Treasuries due on Aug.15, traders said. In addition, $61 billion in coupon securities mature on the same day.

The Australian dollar hit an 11-month high of $0.8472 after Reserve Bank of Australia Governor Glenn Stevens said inflation would not fall as far as thought, and investors moved to price in the chance of a rate rise in Australia before year-end.

Against the yen, the Australian dollar rose 0.6 percent to 80.73 yen. The Aussie dollar hit a 10-month high of 82.00 yen earlier this week.

Yen crosses and dollar/yen were seen likely to take cues from moves in regional share prices, especially Chinese equities, traders said. Tokyo shares were 1 percent higher.

Falls in equities or data that cast doubts about the outlook for the global economy can dent risk appetite and trigger selling of higher-yielding currencies such as the Australian dollar against the dollar and the yen. (Editing by Joseph Radford)

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