* Dollar rises against the yen, falls against the euro
* Euro off four-week lows but ECB dovish bias to check gains
NEW YORK, June 27 The dollar rose against the
yen but fell against the euro on Thursday after U.S. data
indicated the Federal Reserve has time before it slows its
efforts to stimulate the U.S. economy
The dollar index, which measures the U.S. currency against a
basket of currencies, was steady at 82.914, still close
to a three-week high of 83.025 touched on Wednesday.
The dollar has benefited from a rise in U.S. yields as more
investors price-in the probability the Fed will start to taper
its $85-billion monthly asset purchase program later this year.
That scenario gained greater credibility last week when
Federal Reserve Chairman Ben Bernanke said the U.S. economy was
expanding strongly enough for the central bank to begin slowing
the pace of its bond-buying stimulus later this year.
But Thursday's data was not overwhelming enough to bring
forward investor expectations for the timing of the official end
to quantitative easing.
U.S. consumer spending rebounded in May and new applications
for unemployment benefits fell last week, suggesting the economy
remained on a moderate growth path.
"U.S. data continues to paint the picture that there is no
need for the Fed to come off QE anytime soon," said Boris
Schlossberg, managing director of foreign exchange strategy at
BK Asset Management in New York.
The dollar was up 0.5 percent at 98.22 yen, edging
toward Monday's peak of 98.70 yen. But traders said its rise
could be capped due to reported Japanese offers above 98.30 yen
and further large demand to sell the dollar above 98.70 yen.
The euro edged up 0.2 percent to $1.3038 pulling away
from Wednesday's low of $1.2983.
The broad trend for dollar strength over the coming months
on expectations of reduced Fed stimulus will remain, said Asmara
Jamaleh at Intesa Sanpaolo in Milan. U.S. data this week and
next week could see the dollar drop if it lags forecasts, but
any falls would provide a buying opportunity, she said.
Other U.S. data due on Thursday includes pending home sales
Analysts were a bit more bleak on the euro's outlook after
it closed below its 200-day moving average at $1.3073 and
European Central Bank officials said the ECB was not ready to
wind down stimulus.
The euro/dollar formed a death cross with the 100-day simple
moving average at $1.3071, now below the 200-day SMA at $1.3072.
With the 50-day SMA at $1.3077, and it is probable that there
will be both a second and third occurrence of a death cross in
coming days when that SMA moves below both the 100-day and
200-day simple moving averages.
A death cross occurs when the shorter-term moving average
drops below a longer-term term moving average.
"We are bullish on the dollar, while the euro is expected to
weaken as some of the comments from ECB policymakers have been
fairly dovish," said Tom Levinson, currency analyst at ING.
The Australian dollar rose 0.4 percent to $0.9310,
after hitting a 33-month low of $0.9145 on Monday.
Sterling fell to a trough of $1.5243 on Thursday, its
lowest in more than three weeks, after an unexpected downward
revision to UK year-on-year first quarter growth.