* Dollar little changed against euro, yen
* Focus on U.S. consumer prices data later in session
* RBA governor speech eyed for potential Aussie impact
By Shinichi Saoshiro
TOKYO, July 22 The dollar stood little changed
and confined to a narrow range against the euro and yen on
Tuesday, as currencies lost some momentum on a slight reduction
in geopolitically-inspired risk aversion.
But that said, markets were still unable to fully shake off
geopolitical concerns as tensions in the Ukraine and Gaza
remained high, limiting the rebound by the dollar and euro
against the safe-haven yen.
The dollar crept up 0.1 percent to 101.48 yen, having
pulled back from a low of 101.09 hit late last week when a
Malaysian airliner was downed over Ukraine and an Israeli ground
offensive in Gaza began.
The euro edged up 0.1 percent to 137.26 yen after
crawling back from a five-month trough of 136.71 yen hit late
Against the dollar, the common currency was effectively flat
at $1.3524 after recovering from a five-month trough of
$1.3491 touched on Friday.
"Geopolitical developments channelled through higher oil
prices will remain key theme this week," said Shinichiro Kadota,
chief FX strategist at Barclays Bank in Tokyo.
"Heightened geopolitical risk accompanied by higher oil will
help the yen and Swiss franc appreciate while weighing on the
Australian and New Zealand dollars. Emerging market currencies
from Taiwan, Singapore, Korea, Thailand and India are also
vulnerable to higher oil," he said.
Oil prices have risen as the threat of escalating tension
between Russia and the West over the crisis in Ukraine mounted,
with U.S. crude surging to a three-week high on
Aside from geopolitical developments, participants kept an
eye on the U.S. consumer prices data due at 1230 GMT. Focus was
on whether the dollar would react if the data proved strong
enough to raise expectations for accelerated monetary tightening
by the Federal Reserve.
The Labor Department is expected to report that U.S.
inflation rose 0.3 percent in June, after rising food prices
pushed the index to its biggest increase in more than a year in
The Australian dollar was little changed at $0.9368
with Reserve Bank of Australia Governor Glenn Stevens' speech at
0300 GMT being watched for comments on monetary policy and the
Aussie's current levels.