* Euro steadies but having broken below channel support
* British pound near 16-month high vs euro on rate outlook
* Yen at 1-week low on improved risk sentiment
* Aussie eyes budget, China data
By Hideyuki Sano
TOKYO, May 13 The euro stabilised near one-month
lows against the dollar on Tuesday, although it remains under
pressure as investors expect the European Central Bank to try to
limit its longer-term strength in a bid to boost the euro-zone
The euro fetched $1.3755, near its one-month low of
$1.3745 hit on Friday, having fallen 1.2 percent since ECB chief
Mario Draghi said the bank was ready to take action next month
to lift economic growth.
"Its easing may not end in June. The euro's uptrend since
last summer is likely to have ended," said Daisuke Uno, chief
strategist at Sumitomo Mitsui Bank.
Uno noted that the euro had broken below a channel of
support connecting its July 2013 low of $1.2755 and February low
Still, the euro zone's disinflationary price trend supports
the euro against currencies with higher inflation, so the euro
is likely to be supported around $1.35 for now, putting the
currency in a range, he added.
Against sterling, it stood at 81.56 pence,
having hit a 16-month low of 81.43 on Monday as the British
currency is buoyed by prospects of future rate hikes by the Bank
of England as the British economy gains momentum.
Data from retailers showed British retail sales jumped in
April as rising house prices encouraged shoppers to buy new
furniture, flooring and other home decor over the Easter holiday
Sterling also regained its footing against the dollar,
having risen to $1.6869 from a one-week low of $1.6832
hit on Friday.
The yen ticked down to a one-week low against the dollar as
improved risk sentiment sent U.S. share prices to record highs.
The yen traded at 102.22 yen to the dollar.
The Australian dollar treaded water at $0.9359,
little changed over the past couple of sessions, ahead of the
Australian government's 2014/15 budget and a raft of Chinese
economic data later in the day.
China's industrial output and fixed assets investment is
expected to have stabilised in April. Retail sales growth is
also seen flat from March at 12.2 percent.
(Editing by Stephen Coates)