* Asian stocks struggle to extend gains
* Fed cheer gives way to caution ahead of Chinese data on Monday
* Selloff in dollar eases somewhat
By Ian Chua
SYDNEY, July 12 (Reuters) - Investors in Asian stocks turned cautious on Friday even after a record closing high on Wall Street, and a selloff in the dollar paused as markets braced for Chinese GDP data that could give telling evidence of weakness in the world’s second biggest economy.
Economists polled by Reuters see China’s second-quarter GDP growth at a median 7.5 percent. The data is set to be released on Monday.
Foreshadowing an even slower growth rate, China’s finance minister said he expected a 7 percent pace for this year, which would be below the government’s own official forecast.
“China’s weak foreign trade data for June provide a pessimistic edge to second quarter GDP estimates. Monthly data, including industrial production and fixed investment, show China’s economy slowed further in the second quarter,” said Alaistair Chan, an economist at Moody’s analytics in Sydney.
“This year is shaping up to be the slowest since 1999, and the risk is increasing that full-year GDP growth will come in below the government’s 7.5 percent target.”
Confirmation of any further weakness in China’s economy would dampen risk appetite.
MSCI’s broadest index of Asia-Pacific shares outside Japan crept up a tepid 0.2 percent, losing steam after three straight sessions of solid gains.
It was, however, on track to end up more than 3 percent on the week, its best since September.
Tokyo’s Nikkei was flat, South Korea’s KOSPI eased 0.5 percent, Hong Kong’s Hang Seng slipped 0.2 percent and China’s mainland shares shed 0.5 percent.
Bucking the region’s weaker trend, Australia’s ASX 200 index climbed 0.5 percent, thanks mostly to strength in the major miners such as BHP Billiton.
The generally lacklustre performance on Asian bourses came after a powerful rise on Thursday and followed a record closing high for the U.S. S&P 500 index and Dow Jones.
Investors had cheered Federal Reserve Chairman Ben Bernanke’s commitment to keep monetary policy accommodative for the foreseeable future.
Before his comments, markets had started to price in the prospect of the Fed scaling back its bond-buying programme as early as September following a string of encouraging data that underscored a clear recovery in the economy.
Currency markets were steadier following a breathtaking selloff in the dollar in the past 24 hours as investors cut bullish positions on Bernanke’s pledge.
The dollar index, which tracks the greenback’s performance against a basket of major currencies, wallowed at 2-1/2 week lows, having slumped more than 2 percent. That fall was the steepest in four years, and normally only seen during financial crises.
The euro jumped as far as $1.3208, well off this week’s trough of $1.2755. It has since retreated to $1.3093, but was still around 2 percent higher on the week.
Analysts at BNP Paribas said the fall in the dollar should be seen as an opportunity to buy because they still expect the Fed to begin winding down its stimulus later this year.
“We forecast an acceleration of U.S. GDP growth in Q3 and Q4 that is consistent with the Fed starting its tapering process in the second half of 2013,” Steven Saywell wrote in a report.
“We choose to recommend a short GBP/USD at 1.5130, targeting a move to 1.45 with a stop at 1.5310,” said Saywell, adding he believed the Bank of England would ease policy in August.
Caution ahead of the Chinese data saw commodity currencies such as the Australian dollar give back much of the recent gains made against the greenback.
The Aussie slipped to $0.9166 from Thursday’s high of $0.9306, keeping in sight a 34-month trough of $0.9036 set earlier this month.
The Aussie’s decline came even as commodity markets were bolstered by Bernanke’s commitment to keep policy loose. Copper was a touch softer on the day at $6,976 a tonne, having jumped 2.6 percent, while gold stood at $1,284 an ounce after a 1.7 percent rally.
Oil lost a bit of momentum as traders took profits on a three-week rally that lifted prices to 15-month highs. U.S. crude eased back to around $105 a barrel, having reached $107.45.