* Dollar near 1-month high vs currency basket on oil drop
* Unexpected rise in U.S. consumer confidence adds support
* Focus shifts to ADP employment report
* Kiwi hits 10-mth low, RBNZ chief sees room for more cuts
By Satomi Noguchi
TOKYO, July 30 (Reuters) - The dollar held steady near a
one-month high against a basket of currencies on Wednesday after
jumping on a sharp drop in oil prices and an unexpected rise in
U.S. consumer confidence.
U.S. stocks rebounded on Tuesday after Merrill Lynch's
<MER.N> latest write-down and share sale suggested a possible
turning point in the credit crisis, giving a boost to the dollar.
The U.S. currency could extend gains if more economic data
this week further assuages market concern about the economy, even
as the housing slump shows few signs of bottoming out, traders
said.
Investors will be closely watching the ADP national
employment survey due later in the day to help reassess forecasts
for U.S. jobs numbers that the government will release on Friday.
"The market has been altering excessively pessimistic views
about the U.S. economy," said Hideaki Inoue, chief manager of
forex trading at Mitsubishi UFJ Trust Bank.
"Key data this week such as the second-quarter growth data
and the jobs report later in the week could encourage some
investors to shift funds back into the dollar, though it depends
on the outcome," said Inoue.
The dollar index, which measures the U.S. unit's performance
against a basket of six currencies, was little changed from late
U.S. trade on Tuesday at 73.279 <.DXY> when it reached a
one-month high of 73.428.
The euro was little changed at $1.5586 <EUR=> after falling 1
percent the previous day, further dented by news on Tuesday that
French consumer confidence plunged to a record low for the
seventh straight month in July.
The dollar edged down 0.1 percent against the yen to 107.98
yen <JPY=> on selling from Japanese exporters but stayed in sight
of a one-month high of 108.30 yen reached on Tuesday.
U.S. crude prices <CLc1> were down slightly on Wednesday
after dropping $2 the previous day, relieving some concern about
inflation and U.S. consumer spending.
The dollar drew support after the Conference Board said on
Tuesday its overall monthly measure of the consumer mood rose in
July despite a forecast for a slight drop, halting a six-month
slide. []
The fact that consumer confidence barely climbed from its
lowest level in more than a decade and home prices continued to
fall in May was overshadowed by the positive shift in market
sentiment, traders said.
AUSSIE AND KIWI DENTED
Market players instead sold the Australian and New Zealand
dollars on views that the impact of the economic slump and the
credit crisis was spreading into the other regions.
"Worries about the economic and financial sector outlook in
Australia and New Zealand are hitting those currencies although
it may be only reflecting broad dollar buying," said a trader at
another Japanese trust bank.
The Aussie fell 0.4 percent to $0.9486 <AUD=D4> after hitting
$0.9473, a six-week low, hurt by the slide in commodity prices
and after the nation's top banks disclosed increased losses from
exposure to distressed credit markets.
The New Zealand dollar declined 0.7 percent to $0.7348
<NZD=D4> and touched a 10-month low of $0.7339 after Reserve Bank
of New Zealand Governor Alan Bollard said he sees plenty of room
for further interest rate cuts. []
The RBNZ is expected to cut rates again in September after it
trimmed them by a quarter-point to 8 percent last week,
undermining the kiwi in what many analysts expect to be an
extended monetary easing campaign to limit the economy's slump.
The kiwi also suffered from reports that New Zealand fund
manager Guardian Trust had suspended repayments from a mortgage
fund.
(Editing by Sophie Hardach)
