* Euro off lows, but struggles to regain momentum
* ECB's Nowotny says exchange rate "not a matter of major
* Aussie eyes key employment data due 0030 GMT
By Ian Chua
SYDNEY, Jan 17 The euro struggled to regain its
momentum on Thursday even after a top European central banker
sounded relaxed about its recent run higher, while the yen
hovered at one-week highs, still underpinned by a wave of
European Central Bank policymaker Ewald Nowotny said on
Wednesday the exchange rate was "not a matter of major concern".
That contrasted with comments from Eurogroup Chairman
Jean-Claude Juncker that the euro was "dangerously high".
The euro blipped up from a low of $1.3257 following
Nowotny's comments, but remained some way off an 11-month high
of $1.3404 set on Monday. It last traded at $1.3286.
Investors had favoured the euro over the U.S. dollar partly
because of the ECB's relatively more upbeat view for the euro
zone, compared with the Federal Reserve's sober assessment of
the U.S. economy.
"We continue to think any dips in EURUSD provide buying
opportunities," said Vassili Serebriakov, strategist at BNP
"In our view the euro also remains attractive on the
crosses, and we are holding long EURCHF and EURSEK trade
Investors have also become cautious about the one-way
bearish trade on the yen thanks to recent comments from Japan's
Economics Minister about excessive weakness in the currency.
The yen has since climbed from a 2-1/2 year trough against
the dollar and a 20-month low versus the euro. The dollar bought
88.42 yen, off the peak of 89.67, while the single
currency fetched 117.48, down from 120.13 set Monday.
Investors had put on large bets against the yen as the new
Japanese government heaped pressure on the central bank to
tackle deflation, calling for a 2 percent inflation target.
The Bank of Japan is widely expected to agree to such a
target at its policy meeting on Jan. 21-22, although some
traders said there could be selling in dollar/yen afterwards,
based on "buy the rumour, sell the fact."
Against commodity currencies, the dollar lost a bit of
ground, allowing the Australian dollar to drift up to $1.0571
, nearing the 4-month high around $1.0600 set last week.
All eyes are on Australian employment numbers due at 0030
GMT. Forecasts centred on no jobs growth and a higher
unemployment rate of 5.4 percent.
Any unexpected weakness in the report could see markets
price in a bigger chance of an interest rate cut next month, a
move that could possibly see the Aussie dollar slip.
In the United States, housing data and a report on factory
activity in the U.S. mid-Atlantic region will be on offer.