4 Min Read
* Dollar/yen's slide deepens as traders show caution
* Dollar index struggles near 7-mth lows
* Euro's advance vs dollar limited
* Australia's record GDP run continues in Q1
* A$ hits 1-mth high
* Graphic: World FX rates in 2017 tmsnrt.rs/2egbfVh
By Jemima Kelly
LONDON, June 7 (Reuters) - The dollar hit a seven-week low against the yen on Wednesday, with traders cautious a day before Britain votes, the European Central Bank makes a policy decision and former FBI director James Comey gives testimony to the U.S. Senate.
The dollar has lost more than 1 percent versus the safe-haven Japanese currency so far this week, pressured by a sharp drop in U.S. Treasury yields to seven-month lows amid a risk-averse mood, and as weak U.S. data has curtailed expectations for interest rate hikes from the Federal Reserve.
On Wednesday the greenback fell 0.2 percent to 109.22 yen , its weakest since April 21.
"Tomorrow’s what is being dubbed as 'Triple Threat Thursday',...an event-filled day that could send global markets on a bumpy ride," said ING currency strategist Viraj Patel, in London.
Any damaging revelations in Comey's testimony is likely to further hurt Trump and take the wind out of his plans to roll back regulations and overhauling the tax system - an agenda that had sent the dollar to 14-year highs earlier this year.
In Britain, markets are worried that the ruling Conservative party might not get a majority of seats - an outcome seen strengthening Britain's hand in its exit talks with the European Union. Investors had been betting on a solid Conservative win until two weeks ago, when polls narrowed.
And while the ECB is unlikely to start to wind back its expansive stimulus programme given waning global inflation pressures, investors will be keen to hear its stance on the euro zone economy.
ECB President Mario Draghi said last week that while euro zone growth may be improving, inflation remains subdued and still requires substantial stimulus.
Against a basket of currencies, the dollar steadied at 96.649, close to a seven-month low of 96.517 hit the previous day.
The euro edged down 0.2 percent to $1.1256 after data showed German industrial orders dropped far more than expected in April. The single currency hit a seven-month high of $1.1285 last week.
"Of the three big events on...Thursday, the ECB meeting could be the least disruptive as participants have already had time to curtail their previously hawkish expectations," said Ayako Sera, senior market economist at Sumitomo Mitsui Trust in Tokyo.
The Australian dollar added 0.6 percent to reach a one-month high of $0.7555 after data showed the resource-rich economy grew 0.3 percent in the first quarter, dousing fears that its record expansion may have ended.
Sterling was 0.1 percent lower at $1.2900.
For Reuters Live Markets blog on European and UK stock markets see reuters://realtime/verb=Open/url=http://emea1.apps.cp.extranet.thomsonreuters.biz/cms/?pageId=livemarkets (Additional reporting by Shinichi Saoshiro in Tokyo; Editing by Raissa Kasolowsky)