* Dollar retreats from 7-month high vs yen
* Kiwi and Aussie give up earlier gains made on strong data
* ECB's Trichet awaited for comments on slowing euro zone
By Rika Otsuka
TOKYO, Aug 7 (Reuters) - The dollar fell from a seven-month
high against the yen on Thursday, a day after the U.S. currency
rallied as a fall in oil prices to a new three-month low eased
concerns about the drag of high energy prices on the world's
biggest economy.
The New Zealand and Australian dollars gave up earlier gains
against the dollar after strong employment data did little to
alter expectations that the central banks there will cut interest
rates in the coming months.
Traders said investors booked profits following the U.S.
dollar's rally the previous day as oil's retreat below $120 a
barrel helped Wall Street shares on Wednesday. []
The market had digested a hefty amount of dollar offers from
Japanese exporters below 109 yen, not expecting aggressive dollar
selling from them in the short term.
"The dollar is clearly on a rising trend against the yen,"
said Tsutomu Soma, a senior manager of foreign assets at Okasan
Securities.
"Growing concerns the Japanese economy might be in a
recession should also help buoy the U.S. currency," he said.
The yen was under pressure after a series of data supported
the view that Japan's longest expansion of the postwar period may
be over, reinforcing expectations that the Bank of Japan will
keep interest rates at 0.5 percent for a while.
The dollar fell 0.1 percent from late New York trade to
109.57 yen <JPY=>. It had hit a seven-month high of 109.89 yen on
trading platform EBS the previous day.
The market was watching to see if the U.S. currency would
rise above a technical resistance point at 109.95 yen -- a
mid-point between a 13-year low of 95.77 yen struck in March and
last year's peak of 124.14 yen, the highest since December 2002.
The dollar index, which measures the currency's performance
against a basket of six currencies, fell 0.2 percent to 74.184
<.DXY>, down from a two-month peak of 74.307 hit the previous
day. The index closed above the 200-day moving average on
Wednesday for the first time since April 2006.
The euro edged up 0.1 percent to $1.5431 <EUR=> ahead of a
policy meeting on Thursday at which the European Central Bank is
widely seen leaving interest rates unchanged at 4.25 percent.
[]
The focal point in the market will be comments by ECB
President Jean-Claude Trichet on the euro zone economy.
"Trichet has little choice but to admit that euro zone growth
is slowing," said Hideki Hayashi, chief economist at Shinko
Securities.
Analysts said cautious remarks about the euro zone economy
from Trichet would impact the euro more and bring the currency
lower, while the ECB chief is expected to growl again at record
inflation in the region and keep a neutral stance on monetary
policy. []
The New Zealand dollar was nearly flat at $0.7172 <NZD=D4>
after government data showed on Thursday that employment rose
much more than expected in the second quarter, sending the kiwi
to the day's high of $0.7219 at one point.[]
The Australian dollar was up 0.1 percent at $0.9098 <AUD=D4>,
retreating from earlier highs around $0.9130 hit after data
showed net employment increased by 10,900 in July, surprising
economists who had forecast a gain of only 1,250. []
The Aussie had hit a four-month trough of $0.9065 on
Wednesday after the Australian central bank kept interest rates
steady but opened the door to lower rates.
Sterling was little changed at $1.9480 <GBP=D2>, staying near
a seven-week low of $1.9467 reached the previous day, as
investors waited for the Bank of England to deliver its latest
interest rate decision later in the day.
The BoE is expected to keep rates on hold at 5 percent as it
is caught between strong inflationary pressures and the need to
guard against deteriorating growth, like many other major central
banks. []
(Additional reporting by Satomi Noguchi; Editing by Michael
Watson)
