* Euro steadies on PMI data after hitting 8-month low vs dlr
* More Russian sanctions may renew pressure on euro
* Drop in jobless claims buoys greenback versus yen
* NZ dollar tumbles after central bank sounds less hawkish
(Updates market action)
By Richard Leong
NEW YORK, July 24 The euro held above an
eight-month low versus the U.S. dollar on Thursday after the
release of stronger-than-expected German and French business
data, while the New Zealand dollar sank after that nation's
central bank hinted it may pause before raising rates further.
The greenback traded narrowly mixed against most major
currencies as it reached a one-week high against the yen
following data that showed weekly U.S. filings for first-time
jobless benefits fell to the lowest since early 2006.
Private reports showed business activity in Germany and
France strengthened in July and June, respectively, but the
risks to the euro zone economy from any tougher sanctions on
Russia limited gains in the common currency.
Any targeting of Russian banks by the European Union or any
other sanctions would likely weigh on a fragile recovery,
stoking bets of an even looser policy from the European Central
Bank. The ECB cut interest rates in June and has left the door
open to further monetary loosening, which would hurt the euro.
The latest euro zone business data are "a marginal positive,
but I don't think the ECB will change its view on a modest
recovery," said Brian Dangerfield, currency strategist at RBS
Securities in Stamford, Connecticut.
The euro fell to an eight-month low of $1.3438 in early
European trading on the EBS trading system before rebounding to
a session high of $1.34855 after the euro zone "flash"
composite survey was released, showing the index at a
three-month high in July. The single currency was last $1.3463,
little changed from Wednesday's U.S. close.
The euro gained 0.3 percent against the yen to 137.08 yen
and rebounded 0.4 percent against the pound to 79.28
pence after hitting a 23-month low on Wednesday.
The dollar climbed 0.3 percent versus the yen to 101.82 yen,
its strongest in about a week. Its gain was capped after a
report showed U.S. new home sales posted the biggest one-month
drop in nearly a year in June.
The biggest mover among developed country currencies was the
New Zealand dollar. It slumped to a six-week low after
the Reserve Bank of New Zealand (RBNZ) shifted to a wait-and-see
stance and Governor Graeme Wheeler warned against a strong
currency. Still the RBNZ raised its policy rate by 25 basis
points to 3.5 percent.
Some traders have questioned the need for more tightening in
the face of a strong currency, restrained inflation and falling
prices for dairy products, the country's biggest export earner.
The kiwi was on track to fall 1.45 percent for its biggest
one-day drop versus the greenback in more than a year. It last
traded at $0.8575, a level not seen since June 2012.
(Additional reporting by Anirban Nag in London, Shinichi
Saoshiro in Tokyo; Editing by Catherine Evans, Ruth Pitchford,
Bernadette Baum and Peter Galloway)