* PMI surveys bring euro relief from sell off
* Gains seen temporary as Russian sanction risks weigh
* Drop in jobless claims buoys greenback versus yen
* NZ dollar tumbles after RBNZ sounds less hawkish
(Updates market action, changes dateline, previous LONDON)
By Richard Leong
NEW YORK, July 24 The euro rose on Thursday from
an eight-month low versus the U.S. dollar on
better-than-expected German and French business data, while the
New Zealand dollar sank after that nation's central bank hinted
it may pause in raising rates further.
The greenback traded narrowly mixed against most major
currencies as it reached a one-week high against the yen
following data that showed weekly U.S. filings for first-time
jobless benefits fell to its lowest since early 2006.
Private reports showed business activity in Germany and
France improved in July and June, respectively, but the risks to
the euro zone economy from any tougher sanctions on Russia
curbed gains in the common currency.
More European Union sanctions are likely to weigh on a
fragile recovery and stoked bets of even looser monetary policy
from the European Central Bank. The ECB cut interest rates in
June and has left the door open on further monetary loosening, a
move which would hurt the euro.
The latest euro zone business data are "a marginal positive,
but I don't think the ECB will change its view on a modest
recovery," said Brian Dangerfield, currency strategist at RBS
Securities in Stamford, Connecticut.
The euro fell to an eight-month low of $1.3448 in early
European trading on the EBS trading system before rebounding to
a session high of $1.34855 after the euro zone "flash"
composite survey was released, showing the index at a
three-month high in July. The single currency was last $1.3471,
up 0.05 percent from Wednesday's U.S. close.
The euro gained 0.3 percent against the yen at 137.01 yen
and rebounded 0.4 percent against the pound to 79.33
pence after hitting a 23-month low on Wednesday.
The dollar climbed 0.3 percent versus the yen at 101.75 yen,
its strongest in about a week. Its gain was capped after a
report showed U.S. new home sales posted its biggest one-month
drop in nearly a year in June.
The biggest mover among developed currencies was the New
Zealand dollar. It slumped to a six-week low after the
Reserve Bank of New Zealand (RBNZ) shifted to a wait-and-see
stance and Governor Graeme Wheeler warned against a strong
currency. Still the RBNZ raised its policy rate by 25 basis
points to 3.5 percent.
Some traders have questioned the need for more tightening in
the face of a strong currency, restrained inflation and falling
prices for dairy, the country's biggest export earner.
The kiwi was on track to fall 1.3 percent for its biggest
one-day drop versus the greenback in almost 11 months. It last
traded at $0.8586, a level not seen since June 2012.
(Additional reporting by Anirban Nag in London, Shinichi
Saoshiro in Tokyo; Editing by Catherine Evans, Ruth Pitchford
and Bernadette Baum)