* Dlr off 6-mth high vs euro, 5-mth peak vs currency basket
* Dlr cuts gain as Obama pledges to double exports in 5 yrs
* RBNZ keeps rates unchanged, minimal impact on kiwi
* Yen knocked back as higher yielders see rebound
By Satomi Noguchi
TOKYO, Jan 28 (Reuters) - The yen fell and the dollar
retreated from a six-month high against the euro after President
Barack Obama laid out steps to revive the U.S. economy and eased
market worries about moves to limit bank risk-taking by not
revealing concrete plans on the issue.
Obama's announcement last week that he would seek sweeping
reforms to curb risky lending by banks spooked financial markets,
prompting investors to unwind leveraged yen-funded carry trades.
Before Obama's speech on Thursday the dollar powered to a
five-month high against a basket of currencies, boosted by
speculation over higher U.S. interest rates.
But the greenback trimmed gains versus the euro and fell
against other riskier currencies after Obama pledged to double
exports in five years to help create jobs, prompting some market
players to think the U.S. government may seek a weaker dollar to
promote exports. [] []
"So far there seems to be relief in the market that he has
not made strong remarks about the bank regulation plan. But we
need to continue to watch how that pans out," said Ayako Sera, a
market strategist for Sumitomo Trust and Banking.
The euro was at $1.4010 <EUR=>, down 0.1 percent on the day
but up from an earlier low of $1.3930 on trading platform EBS,
its lowest since July.
The euro earlier fell sharply after hitting loss-cutting
orders below $1.3980, traders said.
Worries about Greece's fiscal health continued to weigh on
the euro, which has fallen from a high above $1.51 struck late
last year.
The U.S. dollar index <.DXY> rose as far as 79.066, its
highest since August. On a weekly chart it faced resistance from
its 100-week moving average of 78.939.
ONE DOWN, ONE TO GO
On Wednesday the dollar got a boost from an optimistic tone
by the Federal Reserve.
At the end of its two-day meeting, the Federal Open Market
Committee kept rates unchanged, as expected, and said it intended
to end some emergency lending and asset-buying programmes.
But what set the market aflutter was Kansas City Fed
President Thomas Hoenig, who dissented on the decision to leave
interest rates near zero because he wanted the Fed to remove a
phrase vowing to keep them low for "an extended period".
That led to a sell-off in U.S. Treasuries, especially at the
shorter end of the curve. []
The dollar was also helped by news that the Fed and other
major central banks said they would end emergency dollar lending
operations on Feb. 1.[].
Fed Chairman Ben Bernanke's nomination for a second term
faces a decisive day in the Senate later.
Bernanke had been widely seen as getting enough support but a
public backlash at big banks and the way they were rescued from
the financial crisis has meant the vote could be closer than
expected and has also stirred up market uncertainty.
[]
The dollar was up 0.3 percent at 90.24 yen <JPY=>, having
risen 0.4 percent on Wednesday when it bounced from a six-week
low of 89.14 yen on EBS.
The rebound was helped mainly by a rise in yields on U.S.
Treasuries, which extended in Asian trade.
The euro rose 0.2 percent to 126.42 yen <EURJPY=R>, above a
nine-month low of 125.23 on EBS struck the previous day.
The New Zealand dollar barely reacted to the central bank's
decision to keep rates on hold. The move was expected and the
Reserve Bank of New Zealand reaffirmed that it was looking at
rate rises around the middle of the year.[].
But the kiwi later gained against the dollar and the yen
together with other higher-yielding currencies, to climb 0.3
percent to $0.7087 <NZD=D4> and 0.7 percent to 63.90 yen
<NZDJPY=R>.
Analysts said the rise in the higher yielders was partly a
relief rally after they were sold off in the past two weeks on
concerns about tightening in China.
The Australian dollar rose 0.9 percent to 81.17 yen
<AUDJPY=R>, meeting resistance at its 100-day moving average at
81.60 yen, and 0.6 percent to $0.9004 <AUD=D4>.
(Additional reporting by Kaori Kaneko and Charlotte Cooper;
Editing by Michael Watson)
