FOREX-Euro relieved on Greek talk progress, Fed eyed

* FOMC decision due at 1815 GMT

* Euro lifted on more Greek austerity

* USD gains on Swissy, speculation of more SNB action

By Cecile Lefort

SYDNEY, Sept 21 (Reuters) - The euro rallied against the greenback in Asia on Wednesday, having fully recovered following Italy's downgrade, with markets focussed on the possibility of further stimulus from the Federal Reserve.

The euro rose more than a cent to $1.3711 , from a low of $1.3591 on Tuesday. It jumped as high as $1.3744, after Greece pledged to bring forward painful austerity measures.

The news seemed to have relieved investors who have been worried about the growing prospect of a Greek default due to the nation's failure to meet the fiscal goals of its bailout. Greece needs to receive by next month an 8 billion euro ($11 billion) aid package to avoid running out of cash.

"(The euro) was a bit oversold and there was a paring in those positions. No one wants to be over committed ahead of the FOMC," said Rob Ryan, foreign exchange and interest rate strategist at BNP Paribas in Singapore.

For now, support for the euro is found at $1.3586 with more at $1.3495, while resistance lines up at $1.3801.

The dollar index edged down 0.1 percent to 77.07, having slipped as low as 76.840.

Against the Swissy, it jumped nearly one cent to 0.8881 francs after weak growth and trade data in Switzerland. This fuelled speculation the Swiss National Bank may lift the floor of its currency above the current level of 1.2000 francs against the euro to boost its slowing economy.

The Swiss franc selling led to yen buying, as the Japanese currency became the safe-haven currency of choice. The dollar fell as low as 76.34 yen and was last at 76.46 yen, but still within the snug 76.30/77.85 range of the past month.

Markets were now fully focussed on the United States, hoping the Fed would pull a rabbit out of the hat to boost the nation's flagging economy.

While Fed Chairman Ben Bernanke gave no details of further action to help a U.S. recovery at a speech due around 1815 GMT, analysts anticipate a plan to rebalance the Fed's portfolio to push down longer-term interest rates.

By doing so, investors may be pushed into stocks and corporate bonds and away from safe-haven Treasuries.

But any such plan is probably discounted by now and analysts said it may take something bolder to have more than a fleeting effect.

BNP Paribas' Ryan believes that unless money is thrown into the U.S. economy, bringing down 10-year yields by itself is no longer that much of a stimulus.

"It's not going to weaken the dollar further and it's not going to boost risk appetite," he said.

"Eventually, we have to move towards quantitative easing," he said, though he doesn't expect the Fed to announce it later on Wednesday.

Commodity currencies nudged down in early Asia with the Australian dollar falling 0.1 percent to $1.0250, from $1.0270 in New York. The Aussie has lost 4 percent this month on global uncertainties.

Figures on Japanese trade showed a larger-than-expected trade deficit of 775 billion yen as imports jumped, but had little impact on markets.

Minutes of the Bank of England's last meeting are due later and could show it moving closer to more QE. (Editing by Wayne Cole)