* Euro hits day's low vs dollar on EU's Almunia comments
* Almunia: Eurogroup to discuss strong euro ahead of G7 meet
* Analysts see range trade before U.S. jobless claims, ISM
(Updates with Trichet comment, quotes, changes byline)
By Emelia Sithole-Matarise
LONDON, Oct 1 (Reuters) - The euro fell on Thursday, dragged
down versus the dollar after a top European Union official said
euro zone finance ministers would discuss the currency's
appreciation before a Group of Seven meeting on Saturday.
The dollar gained broadly as waning risk appetite ahead of
key U.S. data prompted investors to seek the relative safety of
the greenback.
The euro fell more than half a percent to the day's low
against the dollar after the EU's Economic and Monetary Affairs
Commissioner Joaquin Almunia said euro strength would be
discussed when officials meet in Istanbul at the weekend
[].
His comments followed statements from finance officials
around the world in the past week on their discomfort with their
currencies' strength against the dollar, which has tumbled
around 10 percent against a currency basket in the past six
months.
"What we are seeing now is a little bit of a correction
taking place given some of the recent strong gains. This has
been triggered by the talk in Europe this morning from both EU
and ECB (European Central Bank) officials discussing the
currency," said Ian Stannard, senior currency strategist at BNP
Paribas in London.
"It does raise speculation that maybe currencies will be
talked about in more detail at the upcoming G7 meeting so ahead
of the meeting we could see the euro pull back," he said.
ECB President Jean-Claude Trichet said on Thursday that
excess foreign exchange moves had an adverse impact. On Monday
he backed the argument for a strong U.S. currency.
G7 finance ministers and central bank governors will meet on
Saturday on the sidelines of World Bank and International
Monetary Fund meetings to discuss recent financial market
developments. []
Canada's finance minister on Wednesday said the G7 would try
to advance the resolution of global economic imbalances,
including currency issues, and traders said dollar-related
comments or news may be a trigger for investors to cover short
positions accumulated recently.
By 1127 GMT, the euro was down 0.7 percent at the day's low
around $1.4530.
The single European currency was also weighed down by data
showing weaker than expected German retail sales but was little
moved by European purchasing management indices. They held
ground or moved closer to recovery in September, although the
possibility of a double-dip slowdown remained. []
The dollar <JPY=> rose 0.3 percent to 90.02 yen, staying
above an eight-month trough of 88.23 yen hit earlier this week
on trading platform EBS. Offers from some Japanese exporters
limited gains in the dollar, traders said.
Traders brushed off Japan's quarterly tankan report, which
showed business morale improved further as the economy picked up
from its worst slump in decades, though it was still negative
[].
The dollar index, which tracks the performance of the U.S.
currency against a basket of six major currencies, was up 0.6
percent on the day at 77.134 <.DXY>.
MORE FX RHETORIC
Financial officials and policymakers in past weeks have
cranked up their rhetoric regarding currencies -- particularly
broad dollar weakness.
Japan's finance minister indicated this week government was
not fazed by the yen's rally to an eight-month high against the
dollar, only to later tone down his remarks.
Sterling weakened in recent days after Bank of England
Governor Mervyn King highlighted the positive economic impact of
a weak currency.
Some analysts said that while such statements were likely to
increase in the future, their impact on the market may be
limited if officials were not seen backing up their words with
action to intervene.
So far, the Swiss National Bank is one of few major central
banks seen acting in the market -- to stem the Swiss franc's
appreciation. Some in the market said the SNB had a hand in
pushing up the euro against the Swiss currency on Wednesday.
Traders awaited the U.S. Institute for Supply Management's
manufacturing index for September due at 1400 GMT, as well as
weekly U.S. jobless claims and testimony from Federal Reserve
Chairman Ben Bernanke later in the day.
The dollar fell on Wednesday after data that increased
expectations the U.S. economy was recovering.
(Additional reporting by Naomi Tajitsu, editing by Nigel
Stephenson)
