* Dollar touches fresh one-month high vs yen
* Kiwi slides after RBNZ cuts rates by 25 bps to 8.0 pct
* Dollar inches back vs yen on Japan exporter selling
* Dollar could extend gains if German Ifo data weak
By Masayuki Kitano
TOKYO, July 24 (Reuters) - The dollar hovered near a
one-month high against the yen on Thursday, supported by the
previous day's drop in oil prices and signs of improved
confidence in the U.S. financial sector.
Oil extended its losses on Wednesday to fall more than $20
from the all-time peak above $147 a barrel hit on July 11, while
U.S. financial shares rose after President George W. Bush dropped
a threat to veto a housing rescue bill.
The dollar was also supported due to comments this week by
Philadelphia Federal Reserve President Charles Plosser, who said
on Tuesday that the U.S. central bank may have to raise interest
rates sooner rather than later to combat inflation.
"Overall, market sentiment is tilted towards dollar buying,"
said Hiroshi Yoshida, a currency trader at Shinkin Central Bank.
The dollar edged up to hit a fresh one-month high of 107.99
yen on trading platform EBS earlier on Thursday.
But it slipped back to 107.83 yen <JPY=> for a decline of 0.1
percent from late Wednesday U.S. trade, nudged lower due to
selling by Japanese exporters.
The euro edged up 0.1 percent to $1.5700 <EUR=>, having
retreated from a record high of $1.6040 hit on EBS last week.
Against the yen, the single European currency was little
changed at 169.31 yen <EURJPY=R>, but still hovered within sight
of an all-time peak of 169.97 yen struck on EBS on Wednesday.
The dollar was benefiting from the rapid fall in oil prices
and the rebound in U.S. equities, which have received a lift
after a series of U.S. bank earnings released last week contained
no startlingly negative surprises, traders said.
"I think such moves were mainly caused by position
unwinding," said a trader for a European bank.
"I have to wonder why people can be so optimistic, but I
guess it's just a reflection of how negative they had been
before," the trader said, alluding to the moves in the dollar and
U.S. share prices.
The high-yielding New Zealand dollar fell sharply after the
country's central bank cut interest rates for the first time in
five years.
The Reserve Bank of New Zealand cut its cash rate by a
quarter percentage point to 8 percent and said further reductions
were likely to counter a rapidly slowing economy. []
The New Zealand dollar slid around 0.4 percent after the rate
decision to $0.7416 <NZD=D4>.
MORE UPSIDE?
The dollar's break above its 200-day moving average against
the yen earlier in the week and the fact that the dollar managed
to hold above it on Wednesday was a supportive factor, said
Shinkin Central Bank's Yoshida.
If the dollar manages to break above a peak hit in mid-June
of 108.59 yen on trading platform EBS, it could next take a stab
at 110.00 yen, traders said.
But for now, Japanese exporters seem intent on selling the
dollar at levels above 108.00 yen and that seemed likely to at
least slow the dollar's advance, they said.
A focal point later in the day will be the German Ifo
business sentiment index for July.
The dollar could rise against the euro if the Ifo data comes
in weak and that could help push the dollar higher against the
yen as well, traders said.
The mid-range forecast of 55 economists polled by Reuters was
for the Ifo economic institute's business climate index to fall
to 100.0 in July from 101.3 in June <ECONDE>.
A fall in July would follow on from a deterioration in morale
in June to its lowest level since December 2005 and signal a
sharp slowdown in Europe's largest economy after a strong start
to the year. []
Though a weak German Ifo would signal that the eurozone is
slowing down, market watchers are also keeping a eye on this
week's U.S. indicators.
Weak readings in existing U.S. home sales due later in the
day and new housing starts to be released on Friday could present
Europe in a better light, analysts said.
(Additional reporting by Shinji Kitamura and Shinichi Saoshiro;
Editing by Michael Watson)
