* Yen, dollar fall broadly as better US data fuel optimism
* Moves limited as next week's Fed meeting awaited
* Aussie dollar outperforms as equities, oil prices climb
(Updates prices, changes byline)
By Jessica Mortimer
LONDON, June 19 (Reuters) - The yen and the dollar fell
broadly on Friday, while perceived higher risk currencies such
as the Australian dollar gained as improved U.S. data fuelled
hopes for a global economic recovery.
Declines in the dollar against the euro were limited,
however, with investors wary ahead of a U.S. Federal Reserve
policy meeting and another record batch of U.S. debt to be
auctioned next week.
A dearth of economic data on Friday meant position
adjustments before the weekend may dominate trade, dealers said.
Data on Thursday showed the number of people on U.S. jobless
benefits fell for the first time since January, and
manufacturing in the U.S. Mid-Atlantic region contracted much
less than expected in June.
Adding weight to the recent optimism, International Monetary
Fund First Deputy Managing Director John Lipsky on Friday
pointed to signs the decline in global output has moderated and
said the IMF is likely to revise up its 2010 growth forecasts.
[].
This helped push European shares up 1.4 percent <> and
oil prices back above $72 per barrel <CLc1>, bolstering the
higher-yielding Australian dollar, which rose around 1 percent
against the yen and the U.S. dollar.
"The market is gathering greater confidence in the world
economy," Bank of New York Mellon currency strategist Neil
Mellor said.
By 1200 GMT, the euro was up 0.4 percent against the yen to
134.84 yen <EURJPY=R> and by 0.2 percent against the dollar to
$1.3925 <EUR=>. The dollar also rose 0.2 percent against the yen
to 96.82 yen <JPY=>.
The Australian dollar outperformed other majors, gaining 1
percent to 78.05 yen <AUDJPY=R> and 0.9 percent against its U.S.
counterpart to $0.8063 <AUD=>.
The declines in the yen and the dollar were limited,
however, with investors unconvinced the recent rally in riskier
assets was justified given the global economy is still
struggling to emerge from its worst recession in decades.
"The leading indicator data aren't enough to start an upward
trend," said Lee Hardman, currency economist at Bank of
Tokyo-Mitsubishi UFJ. "The markets need to see more hard
evidence to confirm the improvement that they expect."
DEBT RECORDS
Another record round of U.S. Treasury debt auctions -- some
$104 billion worth will be offered next week -- will be closely
followed for signs of how investor demand is holding up in the
face of an avalanche of government debt.
Markets will watch whether the Fed addresses a recent rise
in short- and long-term interest rates, either by emphasising it
will keep rates low for some time, or by saying it will extend
its purchase of U.S. Treasuries. An aggressive expansion of its
buying is seen as unlikely. []
The Federal Reserve begins its two-day meeting on Tuesday,
with a decision scheduled for Wednesday.
The Swiss franc remained under pressure, with the euro
holding above the 1.51 franc level <EURCHF=R> after traders on
Thursday cited Swiss franc selling against the euro by the Swiss
National Bank.
The SNB declined to comment but the reports came after the
bank said it would continue its ultra-easy monetary policy, and
renewed a pledge to take action in the currency market to keep
the Swiss franc from rising against the euro.
Analysts and traders view 1.50 francs per euro as a key
level, with the SNB seen unlikely to tolerate a move much below
it, but they note that heavy downside pressure on the pair means
the central bank will need to demonstrate its resolve.
"Euro/Swiss franc is clearly being pressured and the SNB is
going to be up against it to defend it," BNYM's Mellor said.
(Reporting by Jessica Mortimer; additional reporting by
Tamawa Desai; editing by Chris Pizzey)
