(Updates with U.S. data, new comment, changes byline, dateline;
* Euro hits $1.37, recovers all of June losses
* Aussie gains after RBA sticks with policy message
* Dollar index edges away from seven-week lows
By Gertrude Chavez-Dreyfuss
NEW YORK, July 1 The euro slipped from a
six-week high against the dollar on Tuesday as worries about
verbal intervention by the European Central Bank after recent
strength in the euro zone common currency tempered buying.
Investors were wary ahead of the ECB's monetary policy
meeting on Thursday, concerned the central bank would follow
through with specific easing actions after announcing its plan
to further stimulate the euro zone economy a few weeks ago.
"If (ECB) President Mario Draghi does open the door further
to the prospect of Federal Reserve-style asset purchases or warn
about an overvalued euro, the single currency could become
vulnerable to renewed selling," said Omer Esiner, chief market
analyst at Commonwealth Foreign Exchange in Washington.
The euro was down slightly against the dollar at $1.3688
after hitting a six-week peak of $1.37 in the wake of a
dip in a U.S. manufacturing index in June and a
smaller-than-expected rise in U.S. construction spending.
A number of analysts have returned to arguing in recent
weeks that the dollar is on the verge of a push higher, given
the prospect of rises in U.S. interest rates sometime next year.
But U.S. data such as Tuesday's has weighed some on the dollar.
In contrast, the euro has recovered all of the ground lost
since the ECB announced a new round of monetary easing a month
ago. The euro's rise could provoke statements of concern about
"Above $1.38 in the euro ... might put it back on the bank's
radar," Morgan Stanley currency strategist Ian Stannard said.
"$1.37 is the top of the recent range so I wouldn't be surprised
if there are big stops around there."
Dealers pointed to a large option taken last month that
would be triggered by a break above $1.37.
The ECB's action last month will push yet more cash into
circulation in Europe but growth remains very weak at a time
when U.S. jobs data on Thursday may show the nonfarm economy
created more than 200,000 jobs for the fifth month running.
The Australian dollar, meanwhile, rose after a central bank
statement was less dovish than some market participants expected
and stopped short of explicitly talking down the currency.
The Reserve Bank of Australia kept its cash rate steady at a
record low 2.5 percent, as widely expected, after minutes of its
last policy meeting in June predicted subpar economic growth.
The Aussie last traded at US$0.9486, up 0.6 percent
after hitting $0.9494, its highest since early November.
Against the yen, the dollar was up 0.2 percent at 101.50 yen
, still not far from Monday's six-week low of 101.23 yen.
(Additional reporting by Patrick Graham in London; Editing by