* Aussie boosted after central banker keeps quiet on recent
* Yen posts modest losses vs dollar, euro
* Focus on U.S. consumer prices data later in session
* EU foreign ministers meeting eyed for message to Russia
(New throughout, changes dateline from previous TOKYO)
By Patrick Graham
LONDON, July 22 The Australian dollar rose on
Tuesday, the main mover on developed world currency markets,
after the country's central bank chief said he was happy with
current interest rate levels and made no attempt to talk down
The yen was a touch lower after a couple of days of raised
nerves over the situation in Ukraine and Gaza that had driven
the traditional safe haven close to its highest in two months
against the dollar and a six-month peak against the euro.
Analysts said the day's main event would be U.S. inflation
data due later, and they were also focusing on a meeting of
foreign ministers in Brussels due to discuss the bloc's attitude
to Russia's involvement in Ukraine.
The Aussie has gained steadily since hitting an almost
four-year low at the start of this year, driven by signs of
improvement in its domestic economy and an easing off, at least
for now, of nerves over Chinese growth.
Governor Glenn Stevens, who has in the past engaged in
verbal intervention to support growth, said he was content with
the current level of interest rates, prompting markets to pare
back slightly bets on another cut in rates this year. Data on
Wednesday is also expected to show inflation topping its 2-3
"Governor Stevens chose not to talk down the currency, as
has been the central bank's want in past months, and that
boosted the Australian dollar," said Jane Foley, a strategist at
Rabobank in London.
"That said, I doubt the bank feels particularly confident in
the Australian economy's recovery as yet. Until we see greater
signs of capital investment coming through, the Aussie will be
vulnerable at these levels."
The Aussie traded 0.2 percent higher on the day at
The yen dipped, with the dollar and the euro both up 0.1
percent but traders said the market was keeping
a nervous eye on events in Ukraine and the Middle East and was
unlikely to push it sharply lower in the near future.
The threat of a new and deeper round of sanctions against
Russia over its involvement in Ukraine has been hanging over the
euro in particular. EU foreign ministers meet on Tuesday to
decide how precisely to deploy sanctions agreed 10 days ago.
The number of Russian individuals and companies to be
penalized is unclear so there is scope to adopt a tougher
posture but that is expected to stop short of the sweeping
sectoral moves being called for by Washington.
"The best case scenario for markets is if soft diplomacy is
the preferred course of action amid hopes that the threat of
harsher actions could encourage cooperation," analysts from
French bank Credit Agricole said in a morning note.
"In the near-term, any flare-up in tensions is likely to
spur support for the dollar and the yen."
The euro, which broke below $1.35 for the first time since
February last week, was down 0.1 percent at $1.3505 early on in