* Euro falls on latest round of trade tensions
* US plans to limit Chinese investments in US tech firms -WSJ
* Lira trims gains after rallying on Turkey president vote win
* Commodity-linked currencies slip as oil rally runs out of steam
By Tom Finn
LONDON, June 25 (Reuters) - A rally in the euro faded on Monday as the dollar edged up with trade tensions between the United States and the European Union seen deciding the near-term direction for the currencies.
Investors steered away from risk, with Asian equities in retreat and Treasury yields declining, after a report that U.S. President Donald Trump plans to bar many Chinese companies from investing in U.S. technology firms and block more tech exports to Beijing.
The report added to the sense of caution felt after President Trump on Friday threatened to impose a 20 percent tariff on all cars imported from the European Union. The EU responded by saying it will have no choice but to retaliate to such a move.
The euro at 0730 GMT on Monday was down 0.2 percent at $1.1629.
The euro had climbed on Friday as traders were encouraged by improved regional economic growth data and new assurances by Italian politicians that their nation would not leave the single currency.
On Monday, the greenback rose 0.2 percent against a basket of major currencies, moving towards an 11-month high.
But the dollar hit a two-week low versus the safe-haven Japanese yen, another sign that the latest flare-up in global trade concerns has dented investor risk appetite.
“U.S. plans to unveil limits on Chinese tech firms’ investments in U.S. companies have delivered another blow to risk sentiment this morning. The trade dispute drags on and the yen is the main beneficiary,” said Societe Generale macro strategist Kit Juckes.
The greenback fell half a percent to 109.40 yen, its weakest since June 8.
Despite last week’s gains, the euro still appears vulnerable to regional political instability and U.S. tariffs.
U.S. President Donald Trump on Friday called for a 20 percent levy on European Union-assembled car imports.
German Chancellor Angela Merkel faces pressure to deal with the migration dispute that has divided Europe and threatened her own government.
“For the euro there’s a continuous potential for event risks, amongst others political crises in Berlin, and this means a disadvantage in the race for the status as the world’s leading currency,” said Commerzbank currencies strategist Ulrich Leuchtmann.
Commodity-linked currencies dipped as a surge by crude oil prices ran out of steam amid the latest round of trade jitters.
Oil had rallied on Friday after OPEC agreed to an unexpectedly modest increase in production from next month after Saudi Arabia persuaded Iran to cooperate.
The Australian dollar was down 0.1 percent at $0.7432 after gaining 0.85 percent on Friday. The Aussie had fallen to a one-year low of $0.7394 last week, hurt by the Sino-U.S. trade spat.
The Canadian dollar slipped 0.25 percent to C$1.3295 per dollar after advancing 0.4 percent on Friday. The loonie had brushed a one-year low of C$1.3384 last week, buffeted by volatility in crude oil prices.
The Turkish lira was up about 1.5 percent at 4.59 per dollar.
The lira had initially soared after Turkish president Tayyip Erdogan and his ruling AK Party claimed victory in presidential and parliamentary elections on Sunday, overcoming the biggest electoral challenge to their rule in a decade and a half. (Additional reporting by Shinichi Saoshiro in Tokyo; Editing by Toby Chopra)