FOREX-Dollar marks time ahead of key Chinese economic data

* Dollar stays in place ahead of Chinese data release
* Chinese quarterly GDP growth seen at slowest since 1992
* Investors to watch China retail, output figures due at
0200 GMT
* Euro remains range-bound around $1.1270

By Tom Westbrook
SYDNEY, July 15 (Reuters) - The dollar stayed on the
defensive on Monday, pinned down by expectations of a Federal
Reserve rate cut this month, as traders in Asia waited for the
latest update on the health of the world's second largest
economy.
Figures due at 0200 GMT are expected to show Chinese
economic growth hitting its slowest pace in almost a generation
as domestic demand falters and trade tensions bite.
Weaker-than-expected numbers for retail sales, industrial
output or second-quarter gross domestic product, seen growing at
6.2% from a year earlier, could cause investors to move away
from Asian currencies and the Australian dollar.
"We see downside risks to the Chinese economic data,
particularly infrastructure spending," Commonwealth Bank of
Australia CBA.AX analysts wrote in a note to clients on Monday
morning.
That could lift the dollar against the yuan and dent the
Aussie, the CBA analysts said.
Against a basket of currencies .DXY the dollar held near a
10-day low at 96.814, still pressured by comments last week from
Fed Chair Jerome Powell and Chicago Fed president Charles Evans
indicating U.S. rate cuts are needed to boost inflation.
The dollar hovered around 107.80 yen JPY= , bound between
support around 106.80 and resistance at 108.98. Monday is a
national holiday in Japan and dollar-yen trading volumes were
very thin.
The euro trod water against the dollar at $1.1270 EUR= , in
the middle of a two-cent range where the currency has remained
since June.
The dollar shed 0.4% against the single currency last week,
cushioned though by expectations that policy easing in Europe
will follow the Fed.
"An impending interest rate cut and speculation that the
U.S. Treasury may intervene in currency markets are the twin
drivers of the dollar weakness," said Michael McCarthy, chief
strategist at CMC Markets in Sydney.
"With the important China data due around shortly, traders
will likely be cautious Monday morning," he said.
Barring a GDP surprise, investors are likely to focus more
on China's June activity data for clues on whether the economy
continued to weaken heading into the second half or is bottoming
out.
In the U.S., a 25 basis-point rate cut in July is priced
in, along with an almost 20% chance of a 50 basis point cut.
Investors will be looking to U.S. retail sales figures due
Tuesday and company earnings for signs of how shoppers and
businesses are weathering the slowdown.