* Dollar index edges away from 6-mth lows, but eases on yen
* Eyes on U.S. factory survey after poor UK, EU results
* Asia markets orderly on anniversary of 'flash crash'
By Wayne Cole
SYDNEY, Jan 3 (Reuters) - The dollar shook off recent
weakness on Friday as dismal economic news from Europe and the
UK weighed on major rivals, while figures due later in the
session are expected to point to some improvement in U.S.
manufacturing.
Against a basket of currencies, the dollar snapped a
six-session losing streak overnight to stand at 96.747 .DXY ,
up slightly from the recent six-month low around 96.355.
It got a lift when surveys showed British factory output
fell in December at the fastest rate since 2012, while the
German manufacturing sector stayed deep in contraction.
That took the shine off the pound, which eased to $1.3154
GBP= , from a $1.3266 top on Thursday. The euro slipped to
$1.1173 EUR= , from a peak of $1.1225, backing away from major
chart resistance around $1.1249.
"It might be a bit too early to put a tombstone over the
dollar just yet, especially against the EUR and GBP," said
Stephen Innes, chief Asia market strategist at AxiTrader.
Of key importance will be if the Chinese yuan continued its
recent rally against the dollar, he added.
"Every interbank trader I know is looking for the dollar to
weaken into the election year, and with most views now pivoting
to a stronger yuan, short dollars is probably a good position to
be."
The dollar was flat at 6.9593 yuan CNH= in offshore
trading having trended lower for much of the past four weeks.
It was also restrained against the Japanese yen at 108.41
JPY= , testing the December lows and major support under
108.40.
An index of U.S. manufacturing activity due later is
expected to show a slight uptick to 49.0 in December, from 48.1
the month before.
Figures out Thursday showed jobless claims edged lower last
week in a positive signal for the U.S. labour market.
The resilience of employment is a major reason the Federal
Reserve has signalled no more rate cuts will be needed in this
cycle, leading markets to sharply scale back expectations of
further policy easing FEDWATCH .
Several Fed official are speaking on Friday including
Governor Lael Brainard and the heads of the San Francisco,
Chicago, Richmond and Dallas banks.
Analysts expect they will remain upbeat on the economic
outlook and reiterate a steady outlook for rates.
The dollar had benefited from U.S. economic outperformance
for much of 2019, though the recent easing in Sino-U.S. trade
concerns has boosted optimism that this year could favour other
major nations.
So far on Friday, there had been no repeat of the "flash
crash" of Jan. 3 last year when massive stop-loss selling swept
through an illiquid holiday-hit market.
Regulators have been on alert for any signs of strain and
trade was thin but orderly.