* Dollar resilient after more calming words from Fed
* Fed's Dudley and Powell play down worries of stimulus
* Quarter-end adjusting seen helping lift euro
By Ian Chua
SYDNEY, June 28 The dollar hovered just below a
four-week peak early in Asia on Friday, having lost only a bit
of ground after two more Federal Reserve officials sought to
play down fears over the central bank's plan to gradually reduce
Traders said some last minute positioning ahead of the end
of the month and quarter also saw the euro edge off a four-month
trough, although the common currency was still headed for its
second week of declines.
The dollar index, which tracks the greenback's performance
against a basket of major currencies, traded at 82.998
after a flat finish in New York.
It stayed near Thursday's high of 83.171, a peak not seen
since the start of the month. The index was on track for its
second straight week of gains and its biggest two-week rally
since November 2011.
The euro was at $1.3035, having drifted up from a
four-week trough around $1.2984. It was flirting with the 61.8
percent retracement level of its May-June rally.
Against the yen, the dollar held on to modest overnight
gains at 98.50, while the euro stood at 128.37,
having gained 0.9 percent on Thursday.
Investors turned positive on the dollar since Fed Chairman
Ben Bernanke last week laid out a roadmap for scaling back its
asset buying programme.
However, the thought of the end of easy money had sparked a
selloff in equities, government bonds, emerging market assets
and commodity currencies.
This has prompted major central bank policy makers to voice
their concerns this week. New York Fed President William Dudley
and Fed Governor Jerome Powell were the latest to attempt to
quell market nerves.
In fact, New York Fed President William Dudley went as far
as saying that recent market expectations for an earlier rate
rise are "quite out of sync" with the statements and
expectations of the policy-making Federal Open Market Committee.
Those comments helped fuel further gains on Wall Street but
failed to spark another rout in U.S. Treasuries, suggesting the
U.S. bond market is stabilising after a recent sharp selloff.
Analysts at BNP Paribas said the stabilisation in U.S. bonds
appeared to be encouraging a cautious rebound in risk positions
which should help a number of emerging market currencies and put
a squeeze on short positions in commodity currencies.
"We expect this dynamic to continue and we added a short
EURUSD recommendation to our pre-existing short GBPUSD trade on
Thursday," they wrote in a client note.
Sterling took a knock overnight after downward revisions to
GDP, and particularly business investment, bucked the recent
trend of improving data. The pound was down at $1.5252,
well off the month peak of $1.5751.
Markets are keeping an eye on a slew of Japanese data due
this morning including industrial output and retail sales, ahead
of the Chicago PMI index, a barometer of Midwest business
activity and the final reading of U.S. consumer sentiment for