Dollar off 15-month low, sterling under pressure

By Kaori Kaneko

TOKYO (Reuters) - The dollar regained some ground after hitting a 15-month low on Thursday, while sterling was under pressure after the Bank of England governor's comments on its weakness.

High-yielding currencies such as the Australian and New Zealand dollars slipped from recent highs but remained strong, helped by firm commodity prices such as gold, which hit a record high the previous day. <GOL/>

"The broad market trend remains one of dollar weakness with higher commodity prices," said Kazuyuki Takami, senior manager at the foreign exchange trading department at the Bank of Tokyo-Mitsubishi UFJ.

"But comments from (BoE governor) King yesterday reminded the market that the UK is one of the ailing economies among developed countries, and the pound may have more room to fall," he said.

The dollar index, a gauge of the greenback's performance against six major currencies, was at 75.066 after hitting a fresh 15-month low of 74.744 .DXY.

Sterling was trading around $1.6579, having tumbled more than 1 percent on Wednesday when the Bank of England Governor Mervyn King said pound weakness would help British exporters and aid economic recovery.

King was speaking after the release of the bank's quarterly Inflation Report, which showed UK inflation would be below its 2 percent target in two years.

The dollar edged up 0.1 percent to 89.93 yen and the euro was steady at $1.4985, having risen as far as $1.5049 on trading platform EBS the previous day.

The Australian dollar was trading around $0.9310, having risen as high as $0.9345 on Wednesday, its highest since August 2008.

Investors are awaiting Australia's October employment report due at 0030 GMT. Analysts forecast 10,000 jobs were shed in October, with unemployment edging up to 5.8 percent from 5.7 percent before.

The jobs report is expected to give hints as to whether the Reserve Bank of Australia will raise interest rates in December.

Since the Australian dollar has already advanced sharply, the Aussie's gains may be limited even if the figures are better than expected, unless there is a major surprise, said Takami.

Dealers said they were watching further developments after China said it would consider using a basket of currencies, not just the dollar, in guiding the exchange rate of the Chinese yuan, its clearest signal yet that it was close to letting the yuan appreciate after an 18-month hiatus.

(Reporting by Kaori Kaneko; Editing by Chris Gallagher)