* Euro slips vs dollar as traders book profits on rally
* Euro down 0.2 pct at $1.3736
* Yen falters broadly as sovereign risk concerns ease.
* Investors await FOMC minutes for clues to rate outlook
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By Tamawa Desai
LONDON, Feb 17 (Reuters) - The euro failed to sustain early gains against the dollar on Wednesday as traders booked profits from a rally in the single European currency and focus shifted away from Greece's fiscal woes.
The yen, meanwhile, fell broadly as concerns about sovereign risks eased.
Having posted its biggest one-day percentage gain versus the dollar since July on Tuesday, the euro's rally ran out of steam even as Greece won a one-month reprieve to take steps to put its fiscal house in order.
European finance ministers on Tuesday gave Greece until March 16 to show its deficit reduction plan was being rolled out effectively. They set the same deadline for themselves to decide what should happen next. [ID:nLDE61F0XT]
"It is possible that an immediate crisis for EMU has been sidestepped," said Jane Foley, research director at Forex.com.
"However, in terms of structural reform, one month is a drop in the ocean ... It is very likely that the uncertainties surrounding the Greek budget and the pressures on the euro will re-emerge."
The euro has fallen nearly 10 percent against the dollar since December on concerns about Greece's fiscal health and other euro zone peripheral countries, and currency speculators raised net euro short positions to a record high last week.
By 1220 GMT, the euro
Sterling also shed early gains against the dollar after data showed UK jobless claims unexpectedly jumped.
The data offset Bank of England meeting minutes which showed no members voted against a pause in the central bank's asset buying programme, contrary to market speculation dissenters had called for more easing.
Sterling was down 0.1 percent on the day at $1.5768, off
from the day's high of $1.5816
FOMC MINUTES EYED
Market participants will look to the Federal Reserve's January policy meeting minutes due out at 1900 GMT for insights into the U.S. central bank's exit strategy.
Kansas City Fed President Thomas Hoenig, who dissented at the meeting against the Fed's pledge to keep rates low for an "extended period", said on Tuesday the central bank should shed some of the assets it bought to stabilise the economy during the global financial crisis. [ID:nN16114707]
"The minutes could be dollar-supportive if it appears that other FOMC members are sympathetic to Hoenig's dissenting views, even if they resisted voting with him on this occasion," said UBS analysts in a note.
Robust earnings and improvement in U.S. economic data may also buoy the dollar, traders said.
The dollar index, which tracks the greenback versus a basket of six other currencies, rose 0.1 percent to 79.816 <.DXY> after falling to 79.559, its lowest since Feb. 4.
The dollar rose to 90.92 yen
Against the yen, the euro rose 0.4 percent to 124.68 yen
Markets expect the Bank of Japan to keep its ultra-loose monetary policy when it ends a policy meeting on Thursday, though some speculate asset purchases may be increased to stem the country's persistent price declines.
(Additional reporting by Naomi Tajitsu, editing by Nigel Stephenson)