FOREX-Dollar index flirts with four-day gain

                                
   * Aussie, kiwi slide as Europe shares, oil pare gains
                                
 * Dollar holds most gains, traders await FOMC
                                
 * Eyes on U.S. Treasury quarterly refunding ahead of Fed
 (Adds comment, details, updates prices)
                                
 By Nick Olivari
                                
 NEW YORK, Aug 11 (Reuters) - The dollar flirted with four
days of gains against a basket of currencies on Tuesday as
investors await a policy statement from the Federal Reserve and
speculated whether strong U.S. data will support the currency.
                                
 U.S. jobs data last week boosted expectations for higher
U.S. interest rates by early 2010, but with a Fed announcement
scheduled for the conclusion of a two-day meeting on Wednesday
dollar investors chose mostly to wait rather than continue to
buy. 
                                
 High-yielding currencies fell as European and U.S. stocks
declined <.FTEU3> <.GSPC>, prompting traders to sell currencies
seen to be higher-risk versus the dollar and the yen.
                                
 Analysts said there were few market-moving events and
trading volumes are thin in the summer holiday season.
                                
 "Going into the Fed meeting and the better data is making
people re-evaluate the dollar," said John McCarthy, director of
foreign exchange at ING Capital Markets in New York.
                                
 In early New York trade, the dollar index was up at 79.288
<.DXY>, extending gains into the fourth day.
                                
 The euro fell 0.2 percent to $1.4120 <EUR=>, close to a
one-week low around $1.41 hit on Monday. Traders saw support at
the 40-day moving average around $1.4095.
                                
 McCarthy said much of the euro's declines against the
dollar as the New York session opened was technical after the
euro fell below $1.4150, triggering stop-loss orders to sell.
                                
 The market showed little reaction to German consumer price
inflation which was revised up to show a fall of 0.5 percent in
July year-on-year, while the harmonized consumer price index
posted its first annual drop since the index was introduced in
1995. [ID:nBAF001755] [ID:nLB615370]
                                
 The Australian dollar <AUD=> fell 1 percent to $0.8289,
while the New Zealand dollar slipped 1.3 percent on the day to
$0.6675.
                                
 Markets brushed off the Bank of Japan's decision to keep
interest rates at 0.1 percent. BOJ Governor Masaaki Shirakawa
said he saw no risk of a deflationary spiral in Japan.
[ID:nTKU105491].
                                
 The dollar was down 0.8 percent at 96.27 yen <JPY=>, off an
eight-week high of 97.79 yen set last week on electronic
trading platform EBS.
 (Reporting by Nick Olivari; Editing by Kenneth Barry)