* Dollar posts first consecutive sessions of gains since
June
* Euro retreats from $1.20 as investors take profit
* Chinese services growth pushes yuan higher
* Graphic: World FX rates in 2020 https://tmsnrt.rs/2RBWI5E
By Tom Westbrook
SINGAPORE, Sept 3 (Reuters) - The dollar clung to overnight
gains on Thursday, as investors trimmed bets against the
greenback and sold the euro on concerns that the European
Central Bank was worried about its rise.
The bounce has lifted the greenback about 1% above the
28-month low it hit against a basket of currencies on Tuesday
and brought its first back-to-back daily gains since June
=USD .
Few analysts expect it to hold for too long, but it was
steady in the Asia session, edging higher on the Australian
dollar and euro. The yuan rose, however, after an upbeat service
sector survey added another string to China's impressive
recovery. CNY/
"You could put (the dollar bounce) down to a bit of a trend
reversal, it's had a long run downwards," said BNZ senior
markets strategist Jason Wong.
"But if it is a floor, it's only a short term
one...everyone's pretty bearish dollars for good reason," he
said, pointing to a Federal Reserve's policy outlook that will
likely keep rates very low for a long time.
For about a fortnight now the dollar has been fighting to
hold the line after dropping 10% from a March peak. As traders
start to temper stretched bets on the euro it is tracking for
its best week on the common currency in two months.
The euro EUR=EBS fell about half a percent on Wednesday
and has returned to test its overnight low of $1.1822 in Asia.
Remarks on Tuesday from ECB's chief economist Philip Lane,
who he said the exchange "does matter" for monetary policy, were
the cue for selling even though there was no detail on what, if
anything, the bank intends to do about the rising currency.
"The comment itself lacks specifics, making the
interpretation questionable," said OCBC Bank currency strategist
Terence Wu.
"For now, do not rule out further extension towards $1.18,
but we are cautious of calling for further downside from that
level."
YUAN RISING
The standout mover against the tide on Thursday was the yuan
CNY= . It rose 0.1% to as far as 6.8250 per dollar in the
onshore market in the wake of a service sector survey showing a
fourth straight month of expansion in China. The yuan has put on an eye-catching 4.5% gain over the past
three months, which has investors beginning to think China's
policymakers are becoming more tolerant of a stronger currency
as part of a broader shift away from export-driven growth.
"Chinese leaders will be less tempted to use yuan
depreciation to stimulate growth as the export sector plays a
secondary role in growth contribution, said Mizuho's chief Asian
FX strategist Ken Cheung.
Elsewhere the Japanese yen is gradually drifting back to
where it was before Shinzo Abe resigned as Prime Minister as his
close ally Yoshihide Suga firms as the favourite to succeed him.
Suga formally declared his candidacy for the Liberal
Democratic Party leadership on Wednesday and is expected to
persist aggressive fiscal and monetary stimulus. The yen slipped marginally to 106.21 per dollar. The
Australian dollar AUD=D3 slipped 0.2% to $0.7321 and the kiwi
NZD=D3 was marginally lower for the day at $0.6761.
Ahead on Thursday are purchasing managers index figures in
Britain, Europe and the United States and markets are also
awaiting U.S. jobs data at 1230 GMT.
U.S. payrolls figures are due Friday, with soft private jobs
data on Wednesday pointing to possible disappointment of
economists' expectations for 14 million new hires in August.
In emerging markets the dollar bounce kept pressure on the
Indonesian rupiah IDR= amid worries about central bank
independence, following a proposal to give the government more
authority in monetary policy decisions. EMRG/FRX