* Cross/yen recover from lows as choppy Shanghai shares gain
* Sterling edges up from lows vs yen, euro, dollar
* Ifo, U.S. durable goods orders, new home sales due later
By Kaori Kaneko
TOKYO, Aug 26 (Reuters) - The yen and dollar slipped on Wednesday, giving back early gains, as volatile Chinese shares rose and crude trimmed its losses, helping higher-yielding and commodity-linked currencies back from the day's lows.
Ranges were narrow with activity still low due to the holiday season in parts of the northern hemisphere, but sterling hovered close to a 2-½ month low against the euro set the day before.
Higher-yielding and commodity-linked currencies such as the Australian dollar have gained and lost ground along with volatile Shanghai shares recently, with many eyes on China to help pull the global economy out of recession.
Traders said the market was still watching Shanghai but also wanting to see more U.S. data to follow on from larger-than-expected gains in housing and consumer confidence readings on Tuesday to support the view that the economy is on the mend.
"The footing of the U.S. economy is not so negative but investors are cautious about taking it as a trading factor, because its private consumption and jobs market remain weak," said Kosuke Hanao, head of Treasury products sales at HSBC.
The dollar index, a gauge of its performance against six major currencies, was steady at 78.272.
Against the yen, the dollar was steady on the day at 94.22 yen.
The market showed limited reaction to Japanese trade data. Exports fell 1.3 percent in July from June on a seasonally adjusted basis, the first decline in two months and a possible sign that the impact of stimulus measures in major economies worldwide is starting to wane.
The euro edged up 0.1 percent from late New York levels to 134.77 yen after dipping to 134.10 in early trade. It was also flat at $1.4305 after slipping to $1.4280 earlier.
The Australian dollar rose 0.4 percent to 78.90 yen after slipping as far as 78.24 early on in the wake of a sharp drop in crude oil prices on Tuesday.
Better-than-expected Australian construction work spending supported the Aussie and bodes well for next week's second-quarter gross domestic product reading.
The Australian currency also gained 0.4 percent to $0.8373, after starting the session in the red, but faced offers around $0.8425/30, traders said.
Shanghai shares rose more than 2 percent after opening down, while Tokyo's Nikkei average touched its highest in 10 months.
A government researcher said China's economic growth may exceed 10 percent in the first quarter of next year, with monetary policy likely to remain loose in the near term to support the recovery.
Sterling picked up as the session wore on to stand just 0.1 percent down at $1.6334. It edged back from a one-month low around 153.10 yen to be unchanged at 154.00.
It inched away from a 2-½ month low of 87.66 pence per euro set on Tuesday, pulling back to 87.58 pence.
Next up is the German business climate index from the Ifo economic institute at 0800 GMT, which is forecast to have risen to 88.9 in August, up from 87.3 in July.
In the United States, new home sales and durable goods orders for July are also due on Wednesday.
Fed futures are pricing in chances of an interest rate hike in March with a quarter-percentage point hike factored in May. Many analysts believe that pricing is a bit too aggressive, given downside risks to the economy from rising unemployment and sluggish consumer spending.
"We expect the U.S. dollar to trade below 80 on the basket of currencies until the Fed signals its intentions to raise rates," said Joseph Capurso, a currency strategist at Commonwealth Bank.
Also due is a $39 billion five-year note auction. Tuesday's $42 billion sale of two-year notes drew a decent response from both foreign and institutional investors.
Auctions are being closely watched in the currency market as they highlight the vulnerability of the U.S. government's finances and how its huge borrowings will be financed.
Government forecasts on Tuesday showed that the U.S. national debt could nearly double over the next 10 years and approach $20 trillion. (Additional reporting by Anirban Nag in Sydney and Charlotte Cooper in Tokyo; Editing by Michael Watson)