* China February HSBC flash PMI hits seven-month low
* Soft China survey deals blow to Australian dollar
* Dollar slips versus yen as Nikkei retreats
By Shinichi Saoshiro
TOKYO, Feb 20 The dollar dipped and its
Australian counterpart skidded on Thursday after a disappointing
China survey rekindled concerns about emerging market economies
and buoyed currencies such as the yen.
Activity in China's factories shrank again in February as
employment fell at the fastest pace in five years, a preliminary
private survey showed on Thursday.
The soft Chinese survey was a blow to the Australian dollar
, which shed 0.5 percent to $0.8957, coming down from
$0.9012 reached earlier in the session.
The Australian dollar closely tracks economic fortunes of
China, Australia's biggest trading partner.
"The PMI survey revived the idea that the Chinese economy is
stagnant. Even if the Reserve Bank of Australia refrains from
cutting rates, it is not the ideal condition to go long on the
Australian dollar," said Masashi Murata, senior currency
strategist at Brown Brothers Harriman in Tokyo.
The dollar index, which had risen to 80.235 the
previous day after minutes of the U.S. Federal Reserve showed
policymakers remained committed to reducing its massive stimulus
at the current pace, was down 0.1 percent at 80.141.
The dollar was down 0.3 percent at 102.02 yen, having
pulled back from a low of 102.41 hit earlier in the day, as the
China survey cooled risk sentiment, dragging the Nikkei average
The euro was at $1.3746 after reaching a seven-week
high of $1.3773 against the greenback following the release of
the Fed minutes on Wednesday.
The minutes of the Fed's Jan. 28-29 policy meeting, which
was then-chairman Ben Bernanke's last, showed several
policymakers wanted to emphasize that its asset-purchase program
would be trimmed in predictable, $10-billion steps unless the
economy's performance surprises them.
Still, market participants remained cautious over the Fed
holding up the pace of its tapering in the wake of recent data
suggesting U.S. economic growth may be slowing.
"U.S. economic data have turned from good to bad lately.
This raises the possibility of the Fed delaying its taper -
which would boost safe haven currencies like the Swiss franc,"
said Bart Wakabayashi, head of forex at State Street Global
Markets in Tokyo.
Wednesday produced another dim reading on the U.S. economy.
Commerce Department data showed U.S. housing starts recorded
their biggest drop in almost three years in January.
The euro was at 140.21 yen moving further away
from a three-week peak above 141.00 yen hit on Tuesday.
The Canadian dollar licked its wounds after having tumbled
more than 1 percent on Wednesday, its biggest drop in over two
years, after dismal domestic wholesale trade data.
In Asia on Thursday, the Canadian dollar traded at C$1.1085
to the U.S. dollar, having slid from a one-month high
of C$1.0911 hit early on Wednesday.