* Euro steady vs dollar but shy of 8-week high
* Yen rises as investors pocket profits in other majors
* More Treasury auctions awaited after weak 2-yr sale results
By Kaori Kaneko
TOKYO, July 29 (Reuters) - The dollar drifted sideways
against a basket of currencies on Wednesday, hovering not far
from the lowest level of the year, as investors awaited fresh
leads from coming economic events in the United States.
The euro held firm against the dollar but stayed shy of
Tuesday's eight-week high after news of weaker-than-expected
consumer confidence in the United Stated prompted investors to
cut long positions in the European currency.
Major currencies were largely confined in ranges in Asian
trade as investors remained cautious about a recent rapid rise in
assets such as stocks and commodity prices.
"The currency market is taking a breather after the recent
run-up," said Mitsuru Sahara, chief manager of currency
derivatives trading at Bank of Tokyo-Mitsubishi UFJ.
The dollar index <.DXY>, a gauge of its performance against
six major currencies, was steady at 78.843 from late U.S. trade
on Tuesday when it fell as far as 78.315, its lowest since
December.
The U.S. currency inched down 0.2 percent to 94.35 yen
<JPY=>.
"Investors will continue to assess the real economy by
looking at economic data in the U.S. But it is hard to predict
how the currency market will react as recent data has been giving
mixed signals and upcoming data is likely to do the same," said
Sahara.
The yen was higher as investors pocketed profits on gains in
the dollar and other yen crosses as well as global stocks after
their rallies of the past two weeks.
During that period, the dollar had jumped to 95.39 yen from
July's low of 91.73 yen and other majors rallied sharply against
the yen.
"Asset prices have climbed everywhere this month, giving
investors a chance to book profits before their summer vacation,"
said a trader at a Japanese brokerage.
"There isn't any fresh factor that would prompt investors to
trim risks now," he said.
The euro fell 0.3 percent to 133.51 yen <EURJPY=R> after
falling more than 1 percent the previous day.
Against the dollar, the euro was steady at $1.4167 <EUR=>
from late U.S. trade on Tuesday when it rose as high as $1.4305
on trading platform EBS, its highest since early June.
The Australian dollar slipped 0.5 percent to 77.72 yen
<AUDJPY=R> after touching a six-week high of 79.29 yen the
previous day.
The Aussie was around $0.8250 <AUD=D4> after jumping to a
10-month high of around $0.8340 on Tuesday buoyed by upbeat
comments on Australia's economy by the central bank governor.
The New Zealand dollar was down 0.2 percent at 61.98 yen
<NZDJPY=R> after touching 63.09 yen on Tuesday, its highest since
mid-June. It was trading at about $0.6577 <NZD=D4> after rising
as far as $0.6635 the previous day, its highest since October.
Conference Board data on Tuesday showed U.S. consumer
confidence slid more than expected in July, recording its second
consecutive month of decline as sentiment remained hampered by a
difficult job market. []
A Standard & Poor's/Case Shiller report on Tuesday showed
U.S. single-family home prices rose in May, the first increase in
nearly three years. []
With signs that the U.S. housing market may be stabilising,
investors will also be examining U.S. consumption and employment
conditions in coming data, dealers said.
The Federal Reserve will release its Beige Book of Economic
Conditions at 1800 GMT on Wednesday and the U.S. will release
second-quarter gross domestic product figures on Friday.
The market also awaits more U.S. Treasury auctions this week
and the effect on yields. A record $42 billion two-year Treasury
auction on Tuesday had little impact on the currency market,
though details of the outcome were not encouraging for the
dollar.
Indirect bidders, a key gauge of foreign interest, accounted
for just 32.6 percent versus a three-auction average of 51
percent. []
The Treasury will auction $39 billion of five-year notes on
Wednesday and $28 billion of seven-year notes on Thursday.
(Additional reporting by Rika Otsuka; Editing by Chris
Gallagher)
