* Euro hits 4-mth low vs sterling on Greece, pound support
* Trade thin, U.S. markets closed for holiday
* SNB's Hildebrand says will fight franc appreciation
(Adds comment, detail, updates prices)
By Naomi Tajitsu
LONDON, Jan 18 (Reuters) - The euro hit a four-month low
against a broadly firmer pound on Monday as persistent concerns
over Greece's ballooning fiscal deficit kept the single European
currency under selling pressure in subdued trade.
As Greece's debt burden highlighted the fragility of some
euro zone members, investors awaited comments from a meeting of
the 16-country bloc's finance ministers on Monday.
[]
The ministers are due to discuss the unreliability of Greek
statistics, and are said to be running out of patience with
Athens as it has repeatedly misled its euro zone peers about the
size of its budget deficit.
"The Greek developments are definately casting a shadow on
the euro," said Rob Minikin, currency strategist at Standard
Chartered in London.
"It underlines how a strong euro could compound problems in
the region, and reinvigorates the argument for a weaker euro,"
he said, adding he expected the euro to weaken broadly in the
near term.
On the other hand, sterling gained on firmer UK housing data
and as speculative players chased it higher on reports that
French utility GDF Suez <GSZ.PA> was eyeing a tie-up with
Britain's International Power <IPR.L>.[]
Overall, European trade was subdued as U.S. markets were
closed for Martin Luther King Day.
By 1151 GMT, the euro was flat on the day at $1.4370 <EUR=>.
Traders said options with a $1.4400 strike price expiring later
on Monday were helping to rein in the pair.
Against the pound, the euro fell 0.6 percent to 87.82 pence
<EURGBP=D4>, its lowest since mid-September. Sterling also hit a
one-month high against the dollar at $1.6380 <GBP=D4>.
Following the pound's biggest weekly gain against the dollar
and the euro in two months last week, analysts said sterling
would remain underpinned by potential upside surprises in UK
inflation, jobs and retail sales data due this week.
The dollar index, a gauge of the greenback's performance
against six other major currencies, was at 77.155, versus
Friday's U.S. close of 77.323 <.DXY>.
The latest Commodity Futures Trading Commission data shows
net dollar short positions were valued around $2.7 billion last
week, shifting from a net long of $4.25 billion the previous
week, according to Reuters calculations. []
SWISSIE SUPPORTED
The data also showed a swing to a net long Swiss franc
positions from a net short position the previous week, the
largest net long position since early December.
Market participants said the shift was reflected in the
euro's slide to a 10-month low against the franc last week,
adding a dramatic correction could not be ruled out if the Swiss
central bank chose to intervene to stem further franc strength.
"This ... suggests that any potential intervention from the
SNB could prove very effective - i.e. upside risk on EUR/CHF and
USD/CHF from a position squeeze has risen significantly,"
analysts at Danske Bank said in a note.
Swiss National Bank head Philipp Hildebrand was quoted as
saying on Sunday the central bank would act resolutely to
prevent an excessive appreciation of the franc to ward off the
danger of deflation. []
The euro was little changed at 1.4750 francs <EURGBP=R>, off
a 10-month low around 1.4720 francs earlier this month.
The dollar <JPY=> was little changed at 90.70 yen, hovering
near a four-week low hit late last week.
The yen showed little reaction to a funding scandal linked
to the No. 2 executive in Japan's ruling party []
and as Japan Airlines <9205.T> looked to be filing for
bankruptcy on Tuesday.[]
(Additional reporting by Tamawa Desai, editing by Nigel
Stephenson)
