* Bernanke offers no surprises though he remains cautious on economy
* Euro, Aussie retreat from multi-month highs after ECB cash injection
* Take-up of around half a trillion euros roughly in line with consensus
* Yen not far from nine-month low vs dollar
* Back to data watching, US ISM next
By Hideyuki Sano
TOKYO, March 1 (Reuters) - The U.S. dollar hovered above a three-month low against a basket of major currencies on Thursday after the U.S. Federal Reserve chief stopped short of offering a clear hint of more bond buying.
The dollar index against a basket of currencies stood at 78.72, above a three-month low of 78.095 hit on Wednesday, while the euro traded at $1.3341, up slightly in Asia but hardly recovered from a loss of more than 1 percent from a high of $1.3486 on EBS on Wednesday.
The euro and the Australian dollar nursed heavy losses as investors took profits from the recent rally in riskier assets after a long-awaited massive fund injection from the European Central Bank to banks.
Still, U.S> Federal Reserve Chairman Ben Bernanke’s testimony on Wednesday did little to change a broad consensus in the market that he is ready to pull the trigger on further easing on any signs of economic weakness, shifting market focus on upcoming U.S. data, including manufacturing data later in the day.
“It’s not like Bernanke has dropped the idea of QE3. Yesterday we saw a bit of profit-taking but I don’t think the dollar’s downtrend is over,” said a trader at a Japanese bank.
A weak reading in the ISM manufacturing index could rekindle speculation that the Fed could start a new round of quantitative easing before its current “operation twist” ends in June.
In a classic buy-the-rumour-sell-the-fact move, the euro slumped from near three-month highs after European banks snapped up 530 billion euros of cheap three-year funds from the ECB on Wednesday.
That amount was largely in line with market consensus.
The single currency took another hit after Bernanke stopped short of signaling more stimulus, though he gave a tempered view of the U.S. recovery.
The euro has immediate support at $1.3321, the Feb. 9 high, and $1.3293, the 100-day moving average.
As the dollar broadly rebounds, it edged near a nine-month high against the battered Japanese yen, which has been declining sharply after the Bank of Japan’s easing last month.
The dollar fetched 81.05 yen, down slightly on the day on profit-taking but not far from nine-month high of 81.661 yen hit last week.
Many market players say the U.S. currency could break above that high, even if the pace of its rally may slow after a whopping 6.5 percent gain last month, as the yen could remain under pressure from the BOJ, which set an inflation goal last month.
“In Japan, we still have deflation. There’s room for the BOJ to do more. You should buy the dollar if it falls below 80 yen,” said another Japanese bank trader.
Traders said foreign investors, including large Asian sovereign accounts, have sold the yen they had bought last year as a safe haven from Europe.
Data from Japan’s Ministry of Finance showed foreign investors were net seller of yen bills last week, suggesting they were still not ready to park their funds in the yen.
“Foreign investors don’t seem to be keen to buy the yen yet. Their target for the dollar/yen may be a bit higher,” said Ayako Sera, market economist at Sumitomo Trust and Banking.
The Australian dollar edged up 0.2 percent in Asia to $1.0755, helped by robust Chinese PMI data, though it came only after it had tumbled more than a full cent to $1.0715 from a six-month peak of $1.0857 hit on Wednesday.
Caught up in this unwinding of positions, gold fell an eye-watering 5 percent in its biggest one-day slide in three years. (Additional reporting by Ian Chua in Sydney and Masayuki Kitano in Singapore; Editing by Ed Lane)