* Dollar gains as Fed minutes seen as hawkish
* Euro near 9-mth low vs dlr; fiscal worries still weigh
* Sterling underperforms on weak UK public finances data
(Adds details, updates prices)
By Jessica Mortimer
LONDON, Feb 18 (Reuters) - The dollar edged close to a
seven-month high against a basket of currencies on Thursday
after minutes showed U.S. Federal Reserve policymakers had
discussed strategies for withdrawing monetary stimulus.
The euro fell against the dollar, nearing a nine-month low
hit earlier this week, while sterling came under selling
pressure after data revealed an unexpectedly sharp deterioration
in UK public finances in January.
Analysts said there were concerns that if countries such as
Greece implemented the harsh fiscal measures needed to cut their
debt this would weigh on euro zone growth and the European
Central Bank would be slower in tightening monetary policy.
That view pushed down implied euro zone interest rates on
Thursday. []
"ECB tightening risks being delayed, and yield differentials
are playing in favour of a lower euro/dollar," said Tom
Levinson, currency strategist at ING.
The dollar was supported after Fed minutes on Wednesday
revealed several policymakers wanted to begin selling securities
relatively soon as the U.S. economy finds its footing, and by
strong housing and industrial output data []
[]
At 1213 GMT, the dollar index <.DXY> was up 0.3 percent at
80.619, a shade below the seven-month high of 80.748 hit late
last week.
A weekly close above 80.43, the 200-week moving average,
would establish a near-term uptrend for the dollar. Charts show
the next target at 81.47, which is the index's June 2009 high,
and then 81.90 - a 50 percent retracement of its fall from 89.62
to 74.17 last year.
The euro <EUR=> fell 0.3 percent to $1.3559, just shy of a
nine-month low of $1.3532 struck on Friday, with traders citing
options expiries at $1.3500.
"It hasn't been a huge move but the Fed minutes have helped
the dollar as they were perceived as hawkish," said Johan
Javeus, currency strategist at SEB in Stockholm.
"Whereas before there was a sense that the ECB would be
ahead of the Fed in raising rates it now looks increasingly
likely that the Fed will move before the ECB," he said.
Concerns about fiscal troubles in Greece and other euro zone
countries also continued to weigh on sentiment towards the euro.
Greek Prime Minister George Papandreou said on Wednesday his
country was not seeking European taxpayers' money but needed a
breathing space to cut its budget deficit and borrow "on normal
conditions". []
WEAK STERLING
Sterling underperformed, falling 0.5 percent against the
dollar <GBP=D4> to $1.5587 after figures showed public sector
net borrowing at 4.339 billion pounds last month, the first
January deficit since records began in 1993. []
"Everyone is very focused on the euro zone fiscal situation
at the moment, but the UK is in every bit as bad a shape," said
Levinson at ING.
Commodity-related currencies came under pressure after the
International Monetary Fund said it planned to sell more gold in
the market. []
The Australian dollar <AUD=D4> was down 0.3 percent at
$0.8970 and the New Zealand dollar <NZD=D4> down 0.4 percent at
$0.7003.
The yen was broadly firmer after the Bank of Japan kept
interest rates on hold and held off on new policy initiatives,
as expected. []
The dollar fell 0.6 percent to 90.78 yen <JPY=> while the
euro <EURJPY=R> lost 0.8 percent to 123.20 yen, with analysts
saying the BOJ disappointed some who had speculated there might
be further monetary easing steps.
(Additional reporting by Tamawa Desai; Editing by Susan Fenton)
