FOREX-Euro holds most gains ahead of euro zone GDP data
* Euro up broadly as investors trim bearish positions
* Markets take profits on commodity currencies like Aussie
* US retail sales, consumer price data also awaited
By Lisa Twaronite
TOKYO, Aug 14 (Reuters) - The euro, swept higher by the previous session's wave of short-covering, held onto most of its gains in Asian trade on Tuesday but the market was cautious ahead of euro zone and U.S. economic data.
Hopes for European Central Bank action next month and recent weak economic data out of China prompted an unwinding of some short euro positions, particularly against the Australian and New Zealand dollars.
The euro's newfound strength may be tested later in the day with the release of euro zone growth data, as well as GDP data from France, Germany, Portugal and the Netherlands. Downbeat readings could weigh on the euro, but might have the opposite effect if they increase expectations of more aggressive action by the ECB.
"The euro zone GDP data aren't expected to be good. Germany will also release its report, and some are focusing on that report, since that country has been weathering the crisis," said Kimihiko Tomita, head of foreign exchange for State Street Global Markets in Tokyo.
The euro zone's largest economy is expected to grow, with economists polled by Reuters expecting on average a 0.2 percent rise in German output. By contrast, the euro zone as a whole is expected to show a contraction of 0.2 percent on the quarter, following a flat first quarter.
The euro rose about 0.1 percent to $1.2345, up from Monday's low around $1.2262 and moving back toward last week's high of $1.2444 on the EBS trading platform. Against the Japanese unit, it added 0.2 percent to 96.81 yen.
The European unit's overnight gains were particularly apparent against its Antipodean counterparts. The euro was flat against the kiwi after hitting a two-week high of NZ$1.5282 , and was up 0.1 percent to A$1.0519 against the Aussie after surging nearly 1 percent to A$1.1755 on Tuesday.
U.S. data will also take centre stage later in the session. Retail sales figures for July will offer an important update on how consumer demand fared at the start of the third quarter. The U.S. will also release consumer price data..
Worse-than-expected figures would add to expectations that the U.S. Federal Reserve will act to stimulate the economy.
The bounce in the euro saw the dollar index dip to 82.376, retreating from a one-week high of 82.870 set on Friday. The index was back below its 14-day moving average, now at 82.616.
The greenback fell 0.1 percent against the yen to 78.40 , but was still wedged tightly in the 78.00-78.80 range that has held since late last month.
Investors also took profit in the Aussie against the U.S. dollar, knocking it down 0.1 percent to $1.0519 from a 4-1/2 month high around $1.0612 reached last Thursday. Immediate support is seen around $1.0500, followed by $1.0460, the 20-day moving average.
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