* Euro subdued as confidence about euro zone low
* Short euro positions at record high
* Risk appetite hit by China's bank move
* Japan economy grows at fastest pace since Q2 2009
By Satomi Noguchi
TOKYO, Feb 15 (Reuters) - The euro edged near 9-month lows
against the dollar on Monday as doubts intensified about whether
policymakers in the euro zone will help debt-laden Greece,
prompting investors to add to long positions in the greenback.
Activity in Asia remained generally slow with most regional
markets closed for the Lunar New Year holidays.
But the euro continued to trade heavily ahead of a meeting of
euro zone finance ministers on Monday and Tuesday, with
expectations low for specific measures to bail out Greece.
"There is no sign of a quick fix on Greece's debt problem,"
said a senior trader for a Japanese bank.
"Although I personally feel tired of trading on this topic,
the market still seems to want to chase the euro lower," the
trader said.
Growth-linked currencies like the Australian and New Zealand
dollars edged lower after China's move on Friday to hike bank
reserves for the second time this year, which fuelled concerns
that aggressive monetary tightening by China might slow a global
economic recovery.
A lack of clarity on the debt restructuring of
government-backed Dubai World also weighed on investor appetite
for riskier assets. [].
The euro fell 0.2 percent to $1.3600 <EUR=>, not far from
Friday's low of $1.3532 on trading platform EBS, its weakest
since May 2009.
Concern over how Athens will service its debt, and that Spain
and Portugal may face similar debt problems has hammered the
euro, which has fallen nearly 10 percent since late 2009.
The currency is now vulnerable to a test of $1.3483, a 61.8
percent retracement of the rally from below $1.25 in early March
to the $1.5144 high in November.
Last week the European Commission and the European Central
Bank (ECB) agreed to work together to monitor Greece, but leaders
failed to come up with anything concrete. ECB President
Jean-Claude Trichet said on Sunday that Greece must take extra
measures to fix its budget deficit and scrutiny of its economic
indicators must be heightened. []
"Europe needs a liquidity fund with conditionality, but
finance ministers there are unlikely to deliver one this week,"
JP Morgan said in a note.
"Positions have moved quickly from short U.S. dollar to small
long, but the policy environment is too murky to reverse dollar
strength. We recommend stay long versus commodity currencies and
Europe, but neutral on the yen."
Latest data from the Commodity Futures Trading Commission
show currency speculators increased bets on the dollar to their
highest since 2008, while net short euro positions rose to a
record in the week to Feb 9.
The dollar index <.DXY> was a touch higher at 80.382, not far
from a high of 80.748 struck late last week, which was its
highest since July 2009.
The Aussie was slightly lower at $0.8878 <AUD=D4>, and the
kiwi was down 0.1 percent at $0.6972 <NZD=D4>.
U.S. markets are also shut for a holiday on Monday, but the
week is packed with events, ranging from minutes from the last
Federal Reserve meeting to consumer price data for January and
housing starts. <ECONUS> [].
The dollar rose 0.2 percent against the yen <JPY=> to 90.18
yen while the euro stood at 122.76 yen <EURJPY=R>, nearly flat on
the day after choppy trade above an earlier low of 122.50 yen.
Monday's data showed Japan's economy expanded at the fastest
pace in two quarters in October-December as an export recovery
spurred capital spending.[][]
But the market largely ignored the figures because few
economists expect growth to increase rapidly as falling wages and
a large gap between supply and demand push down prices.
(Additional Reporting by Anirban Nag in Sydney; Editing by
Edwina Gibbs)
