* China GDP and CPI figures match expectations
* Keeps speculation for yuan revaluation intact
* Commodity currencies hold near recent highs vs dollar, yen
By Satomi Noguchi
TOKYO, April 15 (Reuters) - The dollar stayed on the
defensive on Thursday while commodity currencies like the Aussie
held firm after data reinforced views that China's economic
growth was accelerating and Beijing may soon revalue its
currency.
But the reaction was mostly subdued as the results matched
those indicated previously by sources, traders said.
China's economic growth accelerated in the first quarter to
11.9 percent, the fastest annual pace in nearly three years, and
consumer price inflation in March was 2.4 percent year-on-year,
decelerating from February's 2.7 percent rate.[]
"There was nothing new to trade on as they matched exactly
the previously reported numbers and supported optimistic views on
the economy," said a senior prop trader for a big Japanese bank.
"But the Aussie and cross yen are staying unexpectedly firm
without any major corrective moves downward even after rising
earlier on expectations for the Chinese data. That makes me
wonder what could possibly trigger liquidation of positions in
these currencies next."
As the world's third-largest economy continues to gather
steam, speculation is growing that China may be preparing to
slightly loosen its grip on the yuan.
Investors have trimmed long positions in the U.S. dollar
after Singapore effectively revalued its currency <SGD=D4>, which
also fueled speculation China may allow the yuan to appreciate.
Any move by China to revalue is seen to be positive for Asian
currencies and could weigh on the U.S. dollar in the short term.
The dollar index <.DXY> was flat at 80.231, while a break
below 80 risks a test of its mid-March low near 79.50.
China is the single largest buyer of Australian commodity
exports and its insatiable demand has been driving huge price
increases for coal and iron ore.
The Australian dollar <AUD=D4>, which climbed 0.7 percent on
Wednesday, edged down 0.1 percent to $0.9346. It faces some solid
resistance at $0.9407, its high for 2009 set last November.
It was flat against the yen after earlier edging up near this
week's 19-month high at 87.55 yen <AUDJPY=R>.
The dollar rose 0.2 percent to 93.36 yen <JPY=>, capped at
about 93.50 by Japanese exporter selling and by options-related
hedging, traders said.
Dealers say the market is also reluctant to take aggressive
positions in dollar/yen and yen crosses just now because it's not
clear how the yen would react if China were to revalue.
Some think the yen would rise sharply against the dollar if
China allows the yuan to appreciate.
But others wonder if the yen's weakness after Singapore
tightened this week may be a sign that a yuan move would be a cue
for risk-on trades -- which tend to dent the low-yielding yen and
support growth-linked currencies such as the Aussie.
LOW FOR SOME TIME
Adding to the dollar's earlier soft tone were comments by
Federal Reserve Chairman Ben Bernanke that U.S. interest rates
will stay low for some time. []
"The fundamental energy behind the (dollar index) trade is
fading," Westpac said in a note.
"We were looking for U.S. growth to surprise on the upside
but that is now mostly priced in. The DXY looks like a 79-82
range trade for the time being but we still strongly favour a
topside break," it said.
The index fell through its 55-day moving average on Wednesday
and closed below the 23.6 percent Fibonacci retracement of its
rally from 74.50 in late November to its March peak above 82.00.
The euro <EUR=> slipped 0.1 percent to $1.3640, after rising
nearly 0.4 percent on Wednesday, helped by short covering. But
worries about Greece and increased scepticism about the bailout
package are likely to limit the upside.
The yen was also hurt early by renewed demand for riskier
assets like stocks, although it clawed back some ground later in
the Asian day. Strong U.S. corporate earnings and some robust
economic data also boosted sentiment.
Sterling pushed to its highest level since late February at
$1.5520 <GBP=D4>, with talk of buying interest on sterling/yen to
try to trigger loss-cutting buy orders and push it through
resistance at 145 yen.
It touched 145.04 yen <GBPJPY=R>, two-month high, with polls
showing the opposition Conservatives extending their lead over
the ruling Labour party ahead of May 6 elections. []
(Additional reporting by Anirban Nag in Sydney; Editing by
Joseph Radford)
