FOREX-U.S. dollar's rally fades, high-yielders firm

* USD retreats, investors back to growth-linked currencies

* U.S. GDP numbers buoy sentiment towards riskier assets

* Cross/yen higher as long liquidation wanes

By Anirban Nag

SYDNEY, Oct 30 (Reuters) - The U.S. dollar was back on the defensive on Friday as a bout of profit taking in growth-linked currencies and the euro seemed to have run its course with investors piling back into risk.

Currencies like the Australian and New Zealand dollars, stocks .SPX and commodities .CRB all rallied after data showed the U.S. economy expanding at a faster than expected pace.

The world's largest economy grew at an annualised rate of 3.5 percent in the July-September period, beating forecasts of a 3.3 percent rise and ending a deep slump. [nN29354547]

The U.S. dollar, which tends to gain when doubts about a global recovery emerge, traded below the 76 mark against a basket of currencies .DXY =USD and not far from 14-month low of 74.94 struck on on Oct. 21.

The dollar index is now on course to record its seventh monthly decline in 2009 as the latest bout short-covering, which gathered momentum earlier this week, fizzled out.

"Those U.S. GDP numbers gave dollar bulls some pause for thought..it wasn't going to be a one-way street," said Tony Beiber, forex analyst at Suncorp Bank.

"More U.S. data is due later this day and positive numbers could provide a fillip to commodities and stocks."

In the U.S., the University of Michigan consumer sentiment survey for October and the Institute of Supply Management Chicago's October index for manufacturing activity are key data investors will keep an eye. [ECONUS]

Traders said the biggest influence on the currency market would be the month-end flows, with some hefty moves in the global stock markets and portfolio rebalancing flows expected.

The yen JPY= was steady at 91.43 per dollar, having lost ground broadly on Thursday. On the crosses, it ceded ground against the euro EURJPY=R and the Aussie AUDJPY=R as the long liquidation of Japanese leveraged retail money waned.

The euro EUR= was up at $1.4834,from $1.4829 late on Thursday when it jumped over 0.8 percent. The Aussie AUD=D4, having jumped nearly 2 percent on Thursday, held onto gains around $0.9150. It had fallen to a three-week low of $0.8942 on Thursday as speculators unwound long positions.

"Long Aussie positioning is relatively lighter now after the 'risk' correction over the last few days," Goldman Sachs said in a report. "With the robust GDP numbers out of the US, we think the backdrop could be supportive for risky assets in general in the short term."

Goldman recommended initiating long Aussie positions with a target of $0.9500 with a stop loss at around 0.8750.

The kiwi NZD=D4 held ground above $0.7300, recovering from a low of $0.7163 on Thursday. The kiwi was slammed on Thursday after the Reserve Bank of New Zealand (RBNZ) hosed down market expectations of a rate rise in early 2010. (Editing by Wayne Cole)