* Dollar falls back from a 14-year-high on profit-taking
* Several U.S. economic indicators due Thursday
* Euro eyes Italy's move on Monte Paschi di Siena
* AUD and NZD near seven-month low vs dollar
By Yuzuha Oka
TOKYO, Dec 22 The dollar lost some steam on
Thursday, slipping from its 14-year-high against a basket of
currencies as investors took profits before a batch of U.S.
economic data due later in the day is published.
The dollar index, which measures the greenback
against six major rivals, dipped 0.1 percent to 102.96. It has
receded from the 103.65 marked on Tuesday, its highest since
Still, the dollar's decline was limited as the Federal
Reserve signalled more frequent rate hikes in 2017, partly on
expectations for faster economic growth under the incoming Trump
While trade is expected to slow down ahead of Christmas, the
market's near-term focus is on U.S. economic indicators due
Thursday, including revised GDP for July-Sept, durable goods
orders for November, and weekly initial jobless claims.
"The market is relatively quiet on a holiday mood, but if
the U.S. economic data is worse than the market expects, the
dollar is likely to be sold further," said Kumiko Ishikawa, FX
market analyst at Sony Financial Holdings.
The dollar index has gained more than five percent since the
Nov. 8 U.S. election, as traders have bet that Trump will step
up fiscal spending and stoke higher inflation.
The euro was up 0.2 percent at $1.0437, rebounding
from $1.0352 on Tuesday, the lowest since January 2003.
However, the common currency could come under pressure as
investors contemplate the future of the ailing Monte dei Paschi
di Siena bank, Italy's third largest lender.
The world's oldest bank has all but failed to pull off a
last-ditch private sector rescue plan, making a state rescue
appear to be inevitable, sources said on Wednesday.
"The impact on forex market is limited for now, mainly
because many people are away on holidays." said Ayako Sera,
market strategist at Sumitomo Mitsui Trust Bank.
"But European bank stocks are down, and EU bonds could also
be hit later in the day on worries for the future of Monte dei
Paschi," she added.
Prime Minister Paolo Gentiloni's new government is likely
to meet this week to issue an emergency decree to inject capital
into the bank, which the European Central Bank has judged to be
the weakest of the euro zone's major banks.
But such state aid could prove to be politically explosive,
given that investors are required to bear losses under EU
It could also undermine confidence in Italy's wider banking
sector, which is saddled with a third of the euro zone's total
The yen showed little movement ahead of a national holiday
on Friday. The greenback stood at 117.62 yen versus
the yen, retreating from 10-1/2 month high of 118.66 yen set
The Australian and New Zealand dollars held near seven-month
lows against its their U.S. counterpart, weighed down by a
strengthening greenback and anticipation of faster Fed rate
hikes next year.
The Australian dollar edged up 0.1 percent at
$0.7246, after dipping to $0.7223, lowest since early June. New
Zealand's kiwi last stood at $0.6909, close to a
seven-month low of $0.6883 hit on Tuesday.
(Reporting by Yuzuha Oka; Editing by Eric Meijer)