* Euro off 1-mth high vs dlr, Aussie slides after China move
* China hikes banks' required reserves by 50 bps
* Hawkish ECB comments on Thurs spark rate rise talk
(Adds detail, quotes; updates prices)
By Jessica Mortimer
LONDON, Jan 14 (Reuters) - The euro fell back from one-month highs against the dollar and the Australian dollar dipped sharply on Friday after China raised banks' reserve requirements by a further 50 basis points.
China tightening move offered further evidence of the central bank preparing to allow economic growth to slow as it battles inflation, causing investors to pare back risk exposure. This hit equity markets and perceived higher-risk currencies.
The Aussie was hit the most, given Australia's close links to China, but the euro also slipped back towards negative territory against the dollar, reversing a surge earlier in the day that some felt had been overdone.
The euro fell back to as much as a cent below an earlier one-month high around $1.3458 on EBS, with traders saying intraday stop loss orders were triggered on a break below $1.3375.
The single currency's earlier broad surge extended steep gains the previous day after European Central Bank chief Jean-Claude Trichet warned on inflation, prompting speculation the bank may raise rates earlier than thought.
"In a week where a lot of higher-yielding and cyclical currencies have gained, the China move has seen some of those bets come off and this has helped send euro/dollar lower," said Kit Juckes, currency strategist at Societe Generale.
He added, however, that China's "timid tightening" would only be a "speed bump" for currencies like the Australian and Canadian dollars which benefit from strong economic fundamentals and favourable interest rate differentials.
At 1106 GMT, the euro was up 0.1 percent at $1.3374, with traders saying a reportedly large option expiry at $1.3400 on Friday may be influencing price action.
The single currency had earlier vaulted through reported stop loss orders above $1.3400, surpassing its 100-day moving average at $1.3410 and moving back into the Ichimoku cloud -- a widely observed Japanese technical indicator -- seen as a bullish signal.
Concerns about the severity of the euro zone's debt problems lingered, however, and some warned this could leave the euro vulnerable to renewed selling. Technical analysts also highlighted a bearish signal after the 55-day euro/dollar moving average crossed below the 100-day moving average on Thursday.
The Australian dollar was down 0.6 percent at $0.9906, well below an earlier high of $0.9994.
TRICHET LIFTS RATE EXPECTATIONS
The key euro-priced bank-to-bank lending rate jumped up on Friday, a day after Trichet ratcheted up ECB rhetoric on inflation fears in the euro zone, causing many to bring forward expectations for an interest rate rise.
"A lot of banks are busy reassessing their view on when the ECB will raise interest rates, which is supporting the euro and adding to the squeezing of short euro positions," said Niels Christensen, currency strategist at Nordea in Copenhagen.
The dollar index was steady at 79.178, having earlier fallen as low as 78.806. It came under pressure after weak U.S. jobless claims data on Thursday and as a jump in yields on top-quality U.S. 30-year municipal bonds sparked concerns about regional U.S. financing problems.
"We have focused on euro zone problems, U.S. problems and Asian inflation problems all in the last 24 hours, and that makes for a bouncy market," Societe Generale's Juckes said.
The euro was up 0.4 percent against the Swiss franc at 1.2926 francs, off an earlier one-month high of 1.2954. This Swiss currency was pressured ahead of talks between the Swiss government and business, bank and trade union representatives on the implications of the strong franc.
(Editing by John Stonestreet)