* Dollar steady above two-week lows vs currency basket
* Yellen emphasises continuity with Bernanke's policy
* Aussie dollar sets 1-mth high on good Chinese trade
By Ian Chua and Masayuki Kitano
SYDNEY/SINGAPORE, Feb 12 The Australian dollar
hit a one-month high as upbeat Chinese trade data eased concern
about China's economy, while the U.S. dollar held above a
two-week low after Federal Reserve chief Janet Yellen offered no
surprises in her first congressional testimony.
The Aussie dollar rose 0.2 percent to $0.9052. It
touched a high of $0.9063, its strongest level since Jan. 13.
Giving a lift to the Aussie was upbeat trade data out of
China, Australia's biggest export market.
China's trade performance zoomed past forecasts in January
as import growth hit a six-month high, confounding market
expectations that the world's second-largest economy is mired in
a deepening slowdown.
The Australian dollar will probably trade in a range of
around $0.88 to $0.92 in the near term, said Hiroshi Maeba, head
of FX trading Japan for UBS in Tokyo.
"I think it will head higher over the medium to longer
term... But whether it can keep heading higher from here after
having risen above $0.90 is hard to say," Maeba said.
"The reason it has been able to rise back to these levels is
because of position unwinding," he said, adding that there
remained the possibility that the Reserve Bank of Australia
might eventually resort to jawboning to temper the Australian
The Aussie has rallied in recent sessions after the RBA last
week dropped its bias to cut interest rates and toned down its
rhetoric on the currency. This caused the currency to pull away
from a 3-1/2 year low of $0.8660 in late January.
Back in December, RBA chief Glenn Stevens had said that an
Australian dollar above 90 U.S. cents was not suitable for the
Moves among major currencies were mild, with the U.S. dollar
holding steady against a basket of major currencies at 80.650
On Tuesday - the day of Yellen's testimony in Washington -
the dollar index had hit a two-week low of 80.448.
The core message on policy from the new chief of the world's
most powerful central bank was that of continuity with the
approach taken by her predecessor, Ben Bernanke.
For markets, the bottom line was that the Fed remained
committed to winding down its extraordinary stimulus measures
Against the yen, the dollar eased 0.1 percent to about
102.56 yen but remained above the previous day's intraday
low near 102.08 yen.
The euro eased 0.1 percent to $1.3628, staying below
a two-week high near $1.3683 touched on Tuesday.
Despite the modest bounce in the greenback, Westpac currency
strategist Richard Franulovich warned the near-term prognosis
"U.S. retail sales data later this week for example is
likely to underwhelm given known weaker auto and chain-store
sales," he said.
For sterling bulls, the Bank of England's quarterly
inflation report due later on Wednesday will be closely watched.
The report gives the BoE a chance to tweak its forward
guidance on policy and firm up a message that interest rates
will not rise until well into next year.
Such an outcome could give pause to sterling, which set a
near three-year peak of $1.6667 late last month.
Sterling last fetched $1.6448, steady from late U.S. trade on