(Changes dateline, byline, adds quotes, updates prices)
* Euro up 0.1 pct at $1.5022 <EUR=>
* Dollar eases from multi-month highs; traders book profits
* Firmer oil, Liebscher comments lift euro back above $1.50
* Dollar entering sustained long-term recovery or not?
By Veronica Brown
LONDON, Aug 11 (Reuters) - The dollar eased from multi-month
peaks scaled earlier on Monday as rising oil prices and robust
European Central Bank inflation comments prompted investors to
take profits on the U.S. currency's recent clamber higher.
But analysts said the euro's snap back above the $1.50 mark
from near-six month lows could prove to be short-lived, as
markets assess how hard the slowdown blighting the U.S. economy
would hit the rest of the world.
The euro, which last week suffered its biggest weekly fall
since its 1999 inception, fell almost as low as $1.49 <EUR=>
earlier on Monday as downward technical momentum intensified. It
later rebounded above $1.50.
Strong anti-inflation comments from a leading European
Central Bank policymaker and a rebound in oil amid fighting
between Russia and Georgia took some gloss off the dollar's
rally, giving traders an excuse to cash in on the month-long
fall in commodities and dollar's latest surge [].
"Markets have been trading off the commodity sphere and oil
prices finding a little base of support. That helped to drag
euro/dollar back to the top side while the Liebscher comments
amplified the move," Rabobank markets strategist Jeremy Stretch
said.
ECB Governing Council Member Klaus Liebscher's warning that
inflation remained high reminded investors the ECB's main
concern was still to tame inflation.
But ECB President Jean-Claude Trichet's judgment last week
that the euro zone economy was facing tough times confirmed that
the rest of the world is not immune to the economic pain being
endured in the United States.
"Even if the U.S. isn't getting better very fast, it was
always going to be the case that the underlying problems of
Europe were going to be emphasised. The theme has to be that the
dollar is winning the least ugly competition," Stretch said.
At 1018 GMT, the euro was up 0.1 percent on the day at
$1.5022 <EUR=>, rebounding from the near six-month low of
$1.4908 on the EBS platform in early Asian trade.
The dollar index, a measure of the greenback's value against
a basket of six currencies, was trading at 75.744 <.DXY>. The
index hit a six-month high of 76.192 earlier on Monday.
OIL THE FX KEY
Analysts said the euro was likely to remain under pressure
in the near term but could see some sporadic relief as traders
take the opportunity to buy euros relatively cheaply.
"Liebscher was on the hawkish side and that's been helping
the euro," said Ian Stannard, senior currency strategist at BNP
Paribas.
But the dollar looks poised to gain further ground,
especially if traders continue to liquidate the long positions
built up in commodities and non-dollar currencies over recent
months.
Oil rebounded 0.7 percent to $116.04 a barrel <CLc1> on
Monday amid heightened tensions between oil-exporting giant
Russia and former Soviet state Georgia, having hit a three-month
low below $115 on Friday.
Oil prices could be key to the dollar near-term.
"The longer oil stays stable or lower, the more
inflation-targeting central banks such as the ECB and the RBA
(Reserve Bank of Australia) have been able to focus on downside
risks to growth. Conversely if oil were to start creeping higher
again in the absence of clear fundamentals, it would raise the
risk of a partial reversal of recent moves," UBS strategists
said in a note on Monday.
"As policymakers outside of the U.S. converge towards dovish
positions, we believe the market will approach a period of
consolidation as the dollar moves into new, stronger ranges
across the board," they said.
The euro's weakness against the yen, meanwhile, helped keep
the dollar down against the Japanese currency, off 0.25 percent
on the day at 109.88 yen <JPY=>.
(Reporting by Veronica Brown; Editing by Mike Peacock)
