* Upbeat U.S. housing data supports dollar
* Dollar index near 11-month high but seen capped
* Eyes on U.S. inflation, Fed minutes and Jackson Hole
* Kiwi slides as soft data points to pause in tightening
By Hideyuki Sano
TOKYO, Aug 19 The dollar steadied on Tuesday
after Monday's gains on upbeat U.S. housing data and a rise in
U.S. bond yields, but traders are waiting for hints on Federal
Reserve policy intentions before they test major resistance
The only mover among major currencies in Asia was the New
Zealand dollar, which shed a half percentage point after soft
economic data pointed to a pause in the country's rate hikes.
The U.S. dollar index stood flat at 81.612 ,
after a gain of 0.2 percent on Monday, lacking the momentum to
test its 11-month high of 81.716 hit earlier this month.
"The housing data seems to have had an impact on the dollar.
Yet the market is still showing no clear direction yet and I see
dollar-selling orders above current levels. It seems better to
play ranges," said Bart Wakabayashi, head of currencies at State
Street in Tokyo.
The NAHB/Wells Fargo Housing Market index rose unexpectedly
for the third straight monthly gain to a seven-month high of 55
in August, shrugging off the weakness of early this year.
The dollar was also bolstered as U.S. bond yields rebounded
from lows on Monday, raising the dollar's yield attraction, on
hopes of diplomatic solution to the Ukraine crisis even though a
ceasefire has not been reached.
Analysts looked ahead to Wednesday's release of minutes from
the Federal Reserve's July policy meeting and comments from a
global central banking summit in Jackson Hole, Wyoming, starting
on Thursday, although expectations were that the Federal Reserve
would remain dovish on monetary policy.
U.S. consumer inflation data due later in the day is another
focus as tame inflation could enhance expectations that the Fed
will wait longer before raising rates.
The euro traded at $1.3361, having managed to hold
above a nine-month low of $1.3333 set earlier this month despite
concerns about economic weakness in the euro zone and
expectations of more easing from the European Central Bank.
"The market is likely to be in euro short positions. So I am
bit worried that there could be some short-covering (in the
euro)," said Koichi Takamatsu, head of forex at Nomura
The dollar fetched 102.61 yen, having maintained its
slow rebound from a low of 101.51 hit on Aug 8, though few
traders expect a break above 103 in the near term.
"I think many people want to test the dollar's upside but on
the other hand, you can't expect Yellen to be hawkish and the
BOJ is unlikely to ease its policy soon. I doubt it can rise
above 103 yen," said a senior trader at a Japanese bank.
The New Zealand dollar fell 0.5 percent to $0.8432
after soft wholesale inflation data and reduced government
surplus forecasts suggested the Reserve Bank of New Zealand
would be in no hurry to resume rate rises.
A major support is seen at $0.84, its June low, though a
break of that level could pose a threat to its uptrend since the
middle of last year.
The Australian dollar barely responded to the minutes of the
Reserve Bank of Australia's last policy meeting, which contained
few surprises, firming slightly to $0.9338.
(Editing by Eric Meijer)