* Dollar dips vs euro, steady vs yen in thin market
* Asian stocks track Wall St lower
* Investor eye U.S. data on housing, GDP
By Satomi Noguchi
TOKYO, Dec 23 (Reuters) - The dollar fell against the euro and a basket of currencies on Tuesday as investors awaited a slew of U.S. economic data due later in the day for further clues on the depth of the year-long recession.
Asian shares fell after Wall Street slid on more evidence the recession will keep eating into corporate profits, but activity in the currency market remained subdued with a public holiday in Japan.
The dollar held firm against the yen on deepening concerns over the Japanese economy following more gloomy data and a deteriorating economic outlook expressed by the Bank of Japan.
"The market had a very stressful year, so everyone is happy to see the market throughout the Christmas and New Year period without too much fanfare," said a trader at an European bank in Hong Kong.
"I would not expect levels drastically different from where we're now with the euro probably being underpinned towards $1.35," the trader said.
The dollar has lost its momentum since summer as demand receded from U.S. portfolio managers and hedge funds liquidating assets and boosting cash holdings before year-end as the financial crisis deepened.
The euro edged up 0.3 percent to $1.3985, but was rangebound after a plunge late last week from a three-month high of $1.4720 hit on Thursday.
The euro also rose 0.3 percent to 126.22 yen as some institutional investors in the region bought the single currency with price movements exaggerated by small flows in holiday-thinned market, traders said.
The dollar index, a gauge of the U.S. currency's performance against six major currencies, edged down 0.1 percent to 81.080.
While trade volume is expected to remain thin this week ahead of the Christmas Day holiday on Thursday, market players will closely scrutinise data including on new and existing home sales for November and final figures on U.S. third-quarter growth due later in the day.
Economists expect the GDP data to confirm the government's previous estimate of a 0.5 percent contraction in the third quarter, which would mark the sharpest fall since the third quarter of 2001.
The dollar was little changed from late New York trade on Monday at 90.32 yen.
The U.S. currency recovered from a 13-year low of 87.13 yen struck last week after Bank of Japan Governor Masaaki Shirakawa said on Monday yen strength and a global slowdown may reduce Japanese exports further even after a record plunge in November.
Japan logged a trade deficit for the longest period in nearly 30 years in November as a global economic slump and a surging yen led to a record fall in exports, tearing into earnings at big companies such as Toyota Motor Corp..
Shirakawa added that Japan's economic conditions were likely to become more severe even after the central bank cut interest rates close to zero last week.
The New Zealand dollar was steady at $0.5740, little moved by data showing the New Zealand economy slipped deeper into recession in the third quarter, reinforcing expectations for further sharp cuts in interest rates in the country.
(Editing by Tomasz Janowski)