* Yen, dollar gain vs euro on lower equities, oil
* Sterling pares losses after BoE minutes
* Dollar steadies; more Bernanke testimony awaited
* Euro zone May industrial orders fall 0.2 pct m/m
(Adds quote, updates prices; changes byline)
By Jessica Mortimer
LONDON, July 22 (Reuters) - The yen and the dollar edged up
against the euro on Wednesday as falls in equities and oil
prices dampened investors' appetite for riskier assets.
U.S. S&P 500 equity futures were down 0.7 percent <SPc1>,
which increased demand for those currencies which typically gain
in times of risk aversion and weighed on higher risk currencies
such as the Australian dollar.
Sterling pared earlier steep losses, however, after Bank of
England minutes showed policymakers voted unanimously to
maintain their quantitative easing target.
Analysts said Federal Reserve Chairman Ben Bernanke on
Tuesday dented sentiment when he said U.S. interest rates would
stay low for some time [].
"The dollar has found a bit more of a stable footing, which
is largely a function of what Bernanke said yesterday," Bank of
Scotland Treasury market economist Kenneth Broux said.
"There is no reason for the Fed to hasten its way out of QE,
which should dampen some of the recent excitement on equity
markets," he added.
By 1208 GMT, the euro fell 0.5 percent to 132.55 yen
<EURJPY=R>, while it dipped 0.1 percent against the dollar at
$1.4200 <EUR=>.
Traders reported hefty options activity in euro/dollar at
$1.4200, set to expire later in the day. A holder of a digital
option will get payout if spot is above $1.4200 at expiry, while
other expiries at $1.4200 are thought to total 1 billion euros,
market participants say.
On Tuesday the euro hit a seven-week high on Tuesday at
$1.4278 <EUR=>, close to its peak for the year.
The dollar fell 0.3 percent against the yen to 93.36 yen
<JPY=>.
Reaction in the euro was limited, however, after data showed
euro zone industrial orders data unexpectedly fell 0.2 percent
in May, compared with forecasts for a 1.9 percent rise
month-on-month.
"It looks not really consistent with what we had seen for
the euro area...so I have some doubts if we do not see a
substantial revision of this May reading at a later stage," said
Juergen Michels, economist at Citigroup.
STERLING OFF LOWS
Sterling fell 0.2 percent against the dollar to $1.6410
<GBP=D4>, well above an earlier low around $1.6311.
The minutes from the Bank of England's latest policy meeting
showed a 9-0 vote to maintain the 125 billion pound asset-buying
total and keep interest rates at 0.5 percent [].
The market took this as a signal that UK quantitative easing
could be at or near an end -- suggesting the economy may be
starting to recover -- and sterling gained as a result.
"The MPC minutes should be bullish for sterling," Bank of
Scotland Treasury's Broux said.
The Australian dollar fell 0.4 percent against the dollar to
$0.8154 <AUD=> and by 0.4 percent against teh yento 76.14
<AUDJPY=>, dented as oil prices fell below $65 per barrel.
"Levels look quite stretched for these big gainers," said
Lee Hardman, currency economist at Bank of Tokyo-Mitsubishi
UFJ.
Investors awaited further comments from the Fed's Bernanke
later on Wednesday, this time before the Senate Banking
Committee.
Bernanke will repeat his testimony before the Senate Banking
Committee at 1400 GMT, and then take questions.
(Additional reporting by Tamawa Desai in London; Editing by
Ron Askew)
