RPT-FOREX-Dollar slips, Citi news pares safe-haven demand
* Dollar dips vs euro, Wall St rally pares safety buying
* Japan machinery orders fall less than expected
* Yen shows limited reaction to machinery orders
* Dollar/yen seen trapped between seasonal flows (Repeats to fix technical glitch)
TOKYO, March 11 (Reuters) - The dollar dipped against the euro on Wednesday after U.S. shares rallied the previous day on news that Citigroup was profitable in the first two months of 2009, tempering safe-haven buying of the dollar.
U.S. stocks jumped on Tuesday with the Standard & Poor's 500 Index .SPX climbing more than 6 percent, pointing to some improvement in risk appetite among investors. [.N]
A rise in Asian shares on Wednesday underscored that mood, with Japan's benchmark Nikkei average rising more than 4 percent after booking a 26-year closing low on Tuesday. [.T]
"When risk appetite falls the dollar attracts buying, and when such tolerance increases the dollar tends to be sold," said Yuji Saito, head of foreign exchange sales at Societe Generale in Tokyo.
The euro rose 0.2 percent to $1.2704 EUR=, pulling away from a 3-½ month low of $1.2457 hit on trading platform EBS last week.
A trader for a Japanese financial institution cited an accumulation of euro-selling positions as a supportive factor for the single European currency, saying market players were reluctant to increase such bets against the euro at this stage.
The dollar dipped 0.3 percent to 98.40 yen JPY=, having come off a a four-month high of 99.69 yen last week.
A trader for a major Japanese bank said there seemed to be repatriation flows from both Japanese and overseas players, adding that such flows were cancelling each other out.
"Overseas players tend to be dollar buyers, while yen buying tends to be prevalent among Japanese," the trader said. "But they are not appearing in the kind of size that can tilt the supply and demand balance very far," he added.
STUCK IN RANGE
Such two-way flows could keep the dollar hemmed in against the yen until the end of March, said Yuji Matsuura, joint general manager for Aozora Bank's forex and derivatives trading group. The euro is likely to trade between $1.2500 and $1.3000 for a while, he added. Continued...
