* Dollar index hits lowest since early June on JPM results
* Kiwi falls after Fitch cuts NZ outlook to negative
* US Philly Fed data weak; earnings still pose risks
(Adds comments, details; changes byline)
By Vivianne Rodrigues
NEW YORK, July 16 (Reuters) - The dollar touched a six-week
low against a basket of major currencies on Thursday as strong
earnings results from JPMorgan helped offset weak manufacturing
data and anxiety about other U.S. bank earnings.
Investors initially sold the dollar for higher-yielding
currencies and assets after better-than-expected earnings from
JPMorgan Chase <JPM.N> boosted hopes for a U.S. recovery,
diminishing the greenback's safe-haven appeal.
Another report earlier showing a decline in the number of
Americans filing for jobless benefits also lifted spirits.
But the dollar rebounded against most major currencies
after another release showed factory activity in the U.S.
Mid-Atlantic region contracted for a 10th straight month in
July. For stories on U.S. data, see [] and
[]
The mixed data readings combined with trepidation about
upcoming earnings reports from Citigroup <C.N> and Bank of
America <BAC.N> also kept a lid on investor enthusiasm.
"The equities markets are moving back and forth around
unchanged and this is being reflected in the currency markets,"
said Dan Cook, a senior market analyst at IG Markets Inc. in
Chicago. "All in all ... any optimism is set off pretty equally
by pessimism. After the moves (earlier in the week) traders are
thinking it may be time to pull some profit off the board."
An index that measures the dollar against a basket of six
major currencies earlier fell to its lowest level since June 4
before rebounding to trade little changed from Wednesday
<.DXY>.
The euro <EUR=> last traded near flat at $1.4112, off a
session peak of $1.4165. Sterling was flat at $1.6420 <GBP=D4>
after rising as high as $1.6476 earlier.
Some analysts said that suggests markets remain cautious
despite a string of stronger-than-expected earnings this week
from JPMorgan Chase, Goldman Sachs <GS.N> and Intel <INTC.O>.
"Tomorrow we have a few banks reporting that can be seen as
weaker members of the group, and if they disappoint, we could
be in for a very ugly day," said Jacob Oubina, strategist at
Forex.com in Bedminster, New Jersey.
The dollar fell 0.7 percent to 93.61 yen <JPY=> while the
euro and sterling also slipped against the Japanese currency.
REAL ECONOMY
Some analysts also said the breakdown of bailout talks
between the U.S. government and CIT Group <CIT.N>, a lender to
small U.S. firms, was adding to anxiety.
"The financials beat the numbers with very clear help from
the government, but when you look at the real economy
companies, you're seeing a difficult road for them," said Boris
Schlossberg, head of FX research at GFT Forex in New York. "The
problems in the real economy still persist."
Elsewhere, the New Zealand dollar <NZD=D4> fell 0.8 percent
to $0.6440 after ratings agency Fitch downgraded New Zealand's
sovereign outlook to negative, citing a high current account
deficit. []
Still, there were signs of encouragement. One came from
China, where data showed the economy grew 7.9 percent in the
second quarter from a year earlier. That beat expectations and
boosted hope the biggest emerging economy will lead the way out
of the worst global downturn since the 1930s. []
U.S. Treasury Secretary Timothy Geithner, speaking after a
meeting with his French counterpart, cited a "very encouraging"
improvement in financial system stability. []
Also on Thursday, data showed the United States saw an
overall net capital outflow of $66.6 billion in May, a month
during which the dollar lost more than 6 percent of its value.
