CORRECTED-FOREX-Euro firms against dollar, yen; RBA rate decision awaited

Tue Dec 4, 2012 6:16am IST

(Corrects time of RBA announcement to 0330 from 0030, paragraph 2)

* Market expects RBA to cut a quarter point to 3 pct

* Euro hit 6-week high vs dlr, 7-mth high vs yen overnight

By Lisa Twaronite

TOKYO, Dec 4 (Reuters) - The euro rose slightly in early Asian trading on Tuesday, moving back towards a six-week high against the dollar and a seven-month high against the yen marked a day earlier on upbeat news from Spain and Greece.

The Aussie was steady ahead of a Reserve Bank of Australia (RBA) policy decision at 0330 GMT. A Reuters poll of 23 analysts on Friday found 16 expected a cut.

If the cash rate is trimmed a quarter point to 3 percent as expected, that will match the record lows touched during the dark days of the global financial crisis in early 2009.

With no monetary policy review in January, this meeting marks the RBA's only chance "to ensure that the economy receives some additional support over the next two months," said Kathy Lien, managing director of BK Asset Management in New York.

"Therefore the reaction of the Australian dollar to the RBA decision could hinge less on how much the RBA eases and more on whether they signal plans to ease again in the New Year," she said in note to clients.

Against the U.S. dollar, the Aussie rose 0.1 percent to $1.0428, still well shy of last week's two-month high of $1.0491.

The euro rose as high as $1.3076, its highest level since Oct. 22 and last stood at $1.3061, up about 0.1 percent from late U.S. levels on Monday.

Against the yen, the euro was marginally firmer at 107.32 yen, after rising to a seven-month high of 107.67 yen on Monday.

Positive news on Europe's debt crisis offset the impact of disappointing U.S. economic data.

Spanish and Italian bond yields fell as investors became more confident about buying euro zone debt, and Greek bonds rallied after the announcement of details of a debt buy-back.

U.S. manufacturing activity surprisingly contracted in November, dropping to its lowest level in more than three years.

Against its Japanese counterpart, the dollar shed about 0.1 percent to trade at 82.17 yen, moving further away from last month's high of 82.84 yen. (Editing by Edwina Gibbs and Paul Tait)

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