FOREX-Dollar rises vs yen, flat vs euro on data, Fed speakers
* U.S. dollar rises vs Japanese yen, flat vs euro
* Euro off four-week lows but ECB dovish bias to check gains
NEW YORK, June 27 (Reuters) - The dollar rose against the yen, but traded little changed against the euro on Thursday after U.S. data mostly indicated the Federal Reserve has time before it slows its efforts to stimulate the U.S. economy, a sentiment echoed by Fed officials.
The dollar has benefited from a rise in U.S. yields as more investors price in the probability the Fed will start to wind down its $85 billion monthly asset purchase program later this year.
That scenario gained credibility last week when Federal Reserve Chairman Ben Bernanke said the U.S. economy was expanding enough for the central bank to begin slowing the pace of its bond-buying stimulus later this year.
"Since last Wednesday when the Federal Reserve announced its intention to have fully tapered QE3 by mid-2014 - likely June - asset classes around the globe have been roiled by indecision given the sweeping implications of any Fed wind down and its impact on interest rates," said Christopher Vecchio, currency analyst at DailyFX in New York.
But Thursday's data was not strong enough to bring forward investor expectations for the timing of the official end to this round of quantitative easing. U.S. consumer spending rebounded in May and new applications for unemployment benefits fell last week, suggesting the economy remains on a moderate growth path.
The influential head of the New York Fed, William Dudley, said on Thursday the U.S. central bank's asset purchases could be more aggressive than Bernanke outlined last week if economic growth and the labor market turn out weaker than expected.
Meanwhile, Fed Board Governor Jerome Powell said financial markets have overreacted to the Federal Reserve's statements and have brought expectations of the first Fed rate hike too far forward.
The dollar was bid as U.S. Treasury yields rose after data showed pending home sales data for May rose 6.7 percent, far above economists' estimates of a 1 percent gain but that was not enough to alter the overall theme for currency trading.
The dollar last traded up 0.7 percent at 98.39 yen, edging toward Monday's peak of 98.70 yen. But traders said its rise could be capped on large sell orders above 98.70 yen.
The euro was near flat at $1.3015, with the low at $1.2999.
The dollar index, which measures the U.S. currency against a basket of currencies, edged up 0.1 percent to 83.068, after touching a three-week high of 83.171. It was the seventh straight gain for the index.
The broad trend for dollar strength in the coming months will hinge upon expectations of reduced Fed stimulus, said Asmara Jamaleh, an economist at Intesa Sanpaolo in Milan. U.S. data this week and next week could see the dollar drop if it lags forecasts, but any falls would provide a buying opportunity, she said.
Sterling fell to a trough of $1.5200 on Thursday, its lowest in more than three weeks, after an unexpected downward revision to UK year-on-year first-quarter growth.
Analysts were a bit more bleak on the euro's outlook after it closed below its 200-day moving average at $1.3073 and European Central Bank officials said the ECB was not ready to wind down stimulus.
The euro/dollar formed a so-called death cross with the 100-day simple moving average at $1.3071, now below the 200-day SMA at $1.3072.
A death cross occurs when the shorter-term moving average drops below a longer-term term moving average.
With the 50-day SMA at $1.3077, it is probable that there will be both a second and third occurrence of a death cross in coming days when that SMA moves below both the 100-day and 200-day simple moving averages.
"We are bullish on the dollar, while the euro is expected to weaken as some of the comments from ECB policymakers have been fairly dovish," said Tom Levinson, currency analyst at ING In London.
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