* Dollar/yen rises on short-covering
* Sterling edges up after UK house price rise
* Aussie dips vs dollar after RBA minutes
* German ZEW, US data on retail sales, manufacturing
awaited
By Satomi Noguchi
TOKYO, Sept 15 (Reuters) - The dollar rose against the yen
on Tuesday, pulling away from a seven-month low on
short-covering, while investors awaited U.S. data this week
that could determine the near-term direction of the greenback.
The Australian dollar dipped after minutes of the Reserve
Bank of Australia's last policy meeting gave little guidance to
markets on when the cash rate would be raised from its record
low of 3 percent. []
But the direction of the U.S. currency was mixed, with the
dollar falling against sterling after British house prices rose
for the first time in more than two years, giving a boost to
the pound.
Market players largely stayed on the sidelines ahead of
U.S. retail sales data for August and the New York Federal
Reserve's "Empire State" manufacturing figures for September
due later in the session.
Traders and analysts said the trend was towards further
declines in the dollar.
"Strong trends remain in place for the euro, Australian and
and kiwi dollar," National Australia Bank said in a note. "Even
dollar/yen has all-round signals to the downside. These signals
only confirm the overall downside risk in place for the U.S.
dollar."
A steady drop in Treasury yields in the past few weeks
surprised many and triggered speculation that the U.S. dollar
was fast becoming the preferred funding currency for carry
trades.
But analysts said economic data for August is expected to
show a strong rebound in the economy, and what will matter more
for the market and the dollar's direction may be the economic
picture after the unwinding of stimulus measures.
"Data soon to be released is expected to continue showing
firmness in the economy, but such strength may be only
temporary," said Masaki Fukui, senior market economist for
Mizuho Corporate Bank.
"What the market will be more concerned about are September
numbers for U.S. auto sales or consumer spending to see whether
or not the economy can keep in good shape after the end of the
stimulus measures," Fukui said.
Germany's ZEW sentiment index for September is due at 0900
GMT on Tuesday. Separately, Federal Reserve Chairman Ben
Bernanke speaks at 1400 GMT. Comments from two senior Fed
officials on Monday indicated that economic recovery might be
less than robust. []
The dollar was up 0.2 percent against the yen from late
U.S. trading on Monday at 91.12 yen <JPY=>, having risen as
high as 91.23 yen earlier, and pulling away from a seven-month
low of 90.18 yen hit on trading platform EBS on Monday.
Traders said the dollar rose against the yen due to
short-covering, and such dollar buying briefly gained momentum
after the dollar rose above the previous day's intraday high
near 91.15 yen.
The euro was little changed at $1.4621 <EUR=>, having
pulled back from a 2009 high of $1.4654 hit on EBS on Monday.
The dollar index, which measures the dollar's value against
a basket of currencies, was steady at 76.648 <.DXY>, staying
above a one-year low of 76.457 hit last week.
The dollar dipped as low as 1.0322 Swiss francs <CHF=> on
EBS earlier in the day, its lowest since late July 2008, then
cut its losses to gain 0.1 percent to 1.0352 francs.
Sterling rose 0.3 percent to $1.6639 <GBP=D4> after news
that house prices in England and Wales had risen for the first
time in more than two years.
The Royal Institution of Chartered Surveyors said its
seasonally adjusted balance of surveyors reporting a rise in
prices in the last three months versus those reporting a fall
rose to 10.7 in August, the first positive reading since July
2007. []
The Australian dollar recovered from losses made after the
RBA minutes and stood at $0.8619 <AUD=D4>, little changed on
the day.
JAPAN'S NEW FINANCE MINISTER
A Japanese newspaper report saying incoming Japanese leader
Yukio Hatoyama has picked veteran lawmaker Hirohisa Fujii as
finance minister had little impact on the yen, partly because
Fujii was already seen as a front runner for the post.
Hatoyama will take office as prime minister on Wednesday.
Fujii said in an interview with Reuters earlier this month
that Tokyo should not step into currency markets unless
exchange rates move abnormally, and that a strong yen is good
for Japan as it curbs import costs. []
Daisuke Uno, chief strategist at Sumitomo Mitsui Banking
Corp, said one point to watch is whether Fujii will stick to
such a stance after he becomes finance minister.
"If the yen continues to strengthen there is a good chance
it will eat into exporters' profits. The question is whether it
will be all right for him to just emphasise the merits for
imports," Uno said.
(Additional reporting by Anirban Nag in Sydney and Masayuki
Kitano in Tokyo; Editing by Chris Gallagher)
