* Dollar looking to more data for clues on U.S. economic recovery
* China’s spot yuan drops below guidance rate for first time since 2012
* Euro’s German-data boost comes off after ECB comments on negative rates
* Risk currencies benefit from fading fears about Ukraine situation for now
By Lisa Twaronite and Hideyuki Sano
TOKYO, Feb 25 (Reuters) - The dollar steadied against its rivals in Asian trade on Tuesday with major currency pairs sticking to tight ranges as traders awaited economic data later in the session for more clarity on the pace of the U.S. economic recovery.
Market participants in Asia remained focused on China, where a recent spate of soft data has raised concerns about the outlook for growth, in addition to lingering fears about the impact of the government’s efforts to cool the property market.
China’s spot yuan fell below the official midpoint rate for the first time since September 2012 on Tuesday, amid speculation that the country’s central bank may have intervened to add volatility to the currency in preparation for a doubling of its trading band.
Spot yuan has sharply weakened over the past several weeks, guided lower by a series of weak fixings.
“The focus is still very much on China, and the volatility there, although there’s been very little spillover into the G10 forex,” said Sue Trinh, senior currency strategist at RBC Capital Markets in Hong Kong.
“The dollar flow should pick up toward the back end of the week, and we also might have month-end flow shenanigans as well,” as investors fix their positions in the waning days of the month, she added.
The dollar index stood at 80.21, nearly flat on the day and near the middle of its range in the past week between 79.93 and 80.42.
The immediate focus for the dollar is U.S. data later in the day, including house price index and consumer confidence. Over the past few weeks markets have had to contend with negative surprises on U.S. hiring, retail sales and housing.
“At the moment, the market does not have a strong conviction on many issues, including whether the latest weakness in U.S. data is all because of bad weather,” said Katsunori Kitakura, associate general manager of market making at Sumitomo Mitsui Trust Bank.
Traders will also be looking to Thursday, when Federal Reserve Chair Janet Yellen speaks to the Senate Banking Committee in her semi-annual testimony about monetary policy.
Yellen’s first few comments since replacing Ben Bernanke as Fed chief have largely supported the current pace of the stimulus-tapering, suggesting the recent weakness in the economy was merely a blip.
Against the yen, the dollar edged up about 0.1 percent to 102.47 yen, though still remained short of a three-week high of 102.82 yen hit on Friday.
While the dollar is widely seen as having an upper hand on the yen due to the Bank of Japan’s massive quantitative easing, the market lacks a catalyst to spur fresh yen selling at this point, traders said.
“In December, the dollar was firmer because of the excitement over the Fed’s tapering of its stimulus and talk of more easing by the BOJ. But an easing by the BOJ does not look imminent now,” said Sumitomo Mitsui Trust Bank’s Kitakura said.
A Reuters poll last week showed most economists still expect he BOJ to ease monetary policy further by the summer, to give the economy a lift as the effects of the government’s stimulus begins to wane. But respondents remained sceptical that the central bank will achieve its 2 percent inflation target by early next year.
The euro was nearly flat on the day at $1.3736, not far from a high of $1.3773 touched last Wednesday, which was its loftiest peak since Jan. 2.
A surprise improvement in German business morale on Monday pushed the euro close to that high, but it gave up gains after European Central Bank Governing Council member Ignazio Visco said the ECB is ready to consider cutting its deposit rate into negative territory if needed.
While few expect the ECB to adopt negative interest rates soon, concerns that the euro zone is at risk of slipping into deflation has kept speculation of further monetary easing alive.
Highlighting the risk, revised euro zone inflation data showed on Monday consumer prices fell in January at their fastest pace on a monthly basis.
The Australian dollar edged down about 0.1 percent to $0.9024, pulling away from a five-week high of $0.9081 hit a week ago.
Riskier currencies such as the Aussie benefited from Wall Street’s rise to near record highs as well as on hopes of stability in Ukraine.
Ukraine’s dollar bonds rallied on Monday and its five-year debt insurance costs tumbled as hopes grew that the country would win assistance from Western donors.
But traders say it is not yet clear how Ukraine, caught in a geopolitical tug-of-war between Russia and the West, can secure funds it needs to avoid default and bolster its tottering economy.