* Uncertainty on US corporate outlook supports dollar, yen
* Euro, sterling dip as investors remain cautious
* Weaker GE, Bank of America earnings boost dollar (Updates prices, adds comment, details)
By Steven C. Johnson
NEW YORK, July 17 (Reuters) - The dollar firmed on Friday after mixed U.S. corporate earnings raised some concern about the economy and enhanced the dollar's safe-haven appeal at the expense of stocks and higher-yield currencies.
U.S. data showing construction of new homes rose more than expected in June helped ease some of that anxiety, capping dollar gains.
But the overall mood was one of caution, traders said. News that General Electric Co profits fell by almost half in the second quarter added to market worries. Bank of America Corp also reported a lower quarterly profit.
"There's still an underlying tone of risk aversion looming. People don't feel comfortable with the economy," said Melvin Harris, strategist at Advanced Currency Markets in New York.
"Earnings today were not stellar while housing starts data was good but is a volatile indicator," he said,
The uncertainty had investors wary of perceived higher-risk currencies such as the euro and Australian dollar. Steven Butler, head of FX trading at Toronto-based Scotia Capital, said the euro's failure to extend gains much above $1.41 underscored the anxiety.
"It still feels like we're one bad number away from things turning negative again," he said.
The euro was down 0.3 percent at $1.4110 after rising to $1.4144 earlier. It was flat at 132.75 yen. The dollar rose 0.3 percent to 94.08 yen.
An index that measures the dollar against a major currency basket rose 0.3 percent after falling to a six-week low Thursday. Sterling fell 0.7 percent to $1.6318.
Bomb blasts at hotels in Indonesia also dampened risk sentiment, though most analysts said the effect was limited.
STUCK IN RANGES
The market cheered stronger earnings from Goldman Sachs Group and JPMorgan Chase & Co earlier this week as well as big corporations such as Intel Corp, but investors were reluctant to get too optimistic.
Markets shrugged off euro-zone trade data, which showed a surplus of 1.9 billion euros in May, and comments from Japan's top financial diplomat about the U.S. dollar remaining a core asset in Japan's $1 trillion foreign currency reserves.
Rintaro Tamaki, Japan's vice finance minister for international affairs, also said he would not rule out Japanese intervention but added that foreign exchange rates should be determined by the market.
Greg Salvaggio, vice president for trading at Tempus Consulting in Washington, said low risk tolerance was keeping traders on short leashes and currencies in narrow ranges.
Those ranges may hold, he added, until the Federal Reserve details its strategy for raising interest rates from near zero and withdrawing some of the trillions of dollars it's spent to support the U.S. economy during the crisis.
"This has been a difficult market for forex traders," he said.
Fed Chairman Ben Bernanke will deliver his seminannual monetary policy testimony to the U.S. House Financial Services Committee next week.