* Euro touches 2-month low vs dollar
* Aussie dollar steadies after setting 3-1/2 year low
* China's Q4 GDP +7.7 pct y/y vs +7.6 pct in Reuters poll
* U.S. markets closed on Monday for Martin Luther King, Jr.
By Ian Chua and Masayuki Kitano
SYDNEY/SINGAPORE, Jan 20 The U.S. dollar set a
two-month high versus the euro on Monday, having enjoyed a solid
comeback last week after a string of mostly upbeat data
convinced markets the Federal Reserve will continue its gradual
withdrawal of stimulus.
The beleaguered Australian dollar got a bit of relief after
China's annual economic growth in the October-December quarter
of 2013 came in at 7.7 percent, down from 7.8 percent in the
previous three months but slightly ahead of market expectations
for growth of 7.6 percent.
"It's not a particularly good number but there wasn't any
drop to levels below the 7.5 percent threshold," said Satoshi
Okagawa, senior global markets analyst for Sumitomo Mitsui
While the data might have spurred some short-covering in the
Australian dollar, the impetus is unlikely to be strong enough
to prompt traders to go long the Aussie dollar, he added.
The Australian dollar edged up 0.1 percent on the day to
$0.8790. The Aussie, which had been hit by weak jobs
data at home last week, fell to $0.8756 earlier on Monday, its
lowest level in about 3-1/2 years.
Traders said the 87 U.S. cent area should provide good
support, like it did back in 2010, although a break could see it
test $0.8600 in a hurry.
The euro eased versus the U.S. dollar, slipping 0.1 percent
to about $1.3530. The euro fell to $1.3508 earlier on Monday,
its lowest level against the greenback in nearly two months.
Data on Friday showed U.S. industrial output rose at its
fastest clip in 3-1/2 years in the fourth quarter, adding to
other encouraging reports such as retail sales.
Richmond Fed President Jeffrey Lacker on Friday said signs
of an improving labour market justified further reductions in
the Fed's monthly bond purchases.
Against the yen, the dollar slipped 0.3 percent to around
104.03 yen. The dollar has retreated since rising to a
five-year high of 105.45 yen in early January, having fallen to
102.85 yen on Jan. 13, its lowest level in about a month.
There is some caution about the dollar's near-term outlook
against the yen in the wake of the greenback's recent rally,
said Adam Gilmour, head of FX and derivatives sales Asia-Pacific
for Citigroup in Singapore.
"I can tell you from my discussions with a lot of investors
last week, everybody was talking about how the whole market is
long dollar/yen," Gilmour said.
"People are still bullish dollar/yen, but they think it's
gone too far, too fast," he added.
The yen also pushed higher on some of the crosses, with the
euro shedding 0.3 percent to 140.74 yen. Earlier on
Monday, the euro touched a six-week low versus the yen at 140.33
Trading volumes could be dampened by a holiday in the United
States on Monday.