* USD benefits from huge unwind of emerging market, commodity trades
* Eyes on Asian shares after steep falls on Wall St, Europe
* Market anxiously watching PBOC clamp down in China money markets
* JPY relatively steady around 97 per dlr, Nikkei futures dive
By Wayne Cole
SYDNEY, June 21 The U.S. dollar, euro and sterling were all in demand on Friday as the prospect of an end to super-easy money from the Federal Reserve drove a mass migration out of emerging markets and into developed world assets.
Sharply higher Treasury yields and sinking equities also benefited the U.S. dollar, though more against emerging and commodity currencies than against its major competitors.
Indeed, against a basket of majors the dollar was off a shade at 81.693 on Friday, though still up 1.4 percent for the week. The euro was holding at $1.3236 having backtracked form Wednesday's $1.3414 highs.
Neither had the dollar made much progress on the yen, which could turn higher once more should Tokyo shares take a dive as futures suggest they will. After making a brief top at 98.29 yen overnight, the dollar was now back at 97.00.
Instead, all the action was on emerging (EM) and commodity-linked currencies where investors are bailing out of once popular positions and repatriating the funds.
"The normalization of Fed policy, combined with weaker commodity prices and a declining growth differential between the emerging and developed world, makes for a challenging backdrop for EM in the months ahead," said analysts from Barclays.
When investors unwind emerging market positions the most liquid cross is into the U.S. dollar, a major reason it has shot up against currencies from Brazil, to Turkey, South Africa, Poland and Mexico.
But many of those investors are from Europe or the UK or Japan and they then exchange those dollars for euros or pounds or yen, limiting the dollar's advance.
Asian currencies have also been spooked by disappointing data out of China and an ongoing clamp down on liquidity by the central bank there.
That in turn has added to fears of slower global growth which, when combined with a rising U.S. dollar, is poison for commodity prices and currencies leveraged to them.
Even the sedate Norwegian kronor got blasted on Thursday suffering its biggest single day loss against the euro in history.
The Australian dollar sank to its lowest in almost three years at $0.9163, before finding enough bids to pause at $0.9195. The hapless Aussie is also being sold as a proxy for the much less-liquid merging market currencies in Asia and analysts suspect it is only a matter of time before it tests 90 cents.
Still, the fall will suit the Reserve Bank of Australia (RBA) which has long been agitating for a depreciation to help boost export competitiveness at home.
New Zealand's dollar came under heavy pressure after breaking the recent low at $0.7761 to touch $0.7710, its lowest since June last year.
There are no major data due in Asia leaving dealers to anxiously watch share markets and developments in China's money markets. Bank of Japan Governor Kuroda speaks later and will no doubt try his best to reassure investors that the BOJ remains committed to all-out easing.