* Dollar/yen's slide deepens as equities turn bearish
* Dollar index struggles near 7-mth lows as US yields fall
* Euro's advance vs dollar limited before Thursday's ECB
* Australia's record GDP run continues in Q1, A$ hits 1-mth
(Updates prices, adds details and quotes)
By Shinichi Saoshiro
TOKYO, June 7 The dollar wallowed near a
six-week low against the safe-haven yen on Wednesday, with
traders cautious ahead of Britain's general election, a European
Central Bank policy decision and testimony by former FBI
Director James Comey.
The greenback treaded water at 109.490 yen, not far
from 109.225, its lowest since April 21 plumbed overnight.
The dollar has lost 0.9 percent against the yen this week,
also pressured by a sharp drop in U.S. Treasury yields to
seven-month lows as investors sought the safety of government
The U.S. currency was seen coming under more pressure as
previously bullish equities also began declining. Wall Street
shares pulled away from recent record highs and fell overnight
as demand for risky assets waned ahead of Thursday's events.
"The dollar has felt the tug of lower U.S. yields for a
while now, but buoyant stocks had helped neutralise some of that
pressure," said Junichi Ishikawa, senior FX strategist at IG
Securities in Tokyo.
"But it lost even that support, and the dollar's fall
Comey, who will testify on Thursday, was investigating
whether Donald Trump's presidential campaign and Russia colluded
to sway the 2016 U.S. election when he was fired by Trump in
May. Investors are worried his testimony could dampen already
flagging momentum for Trump's agenda of rolling back regulations
and overhauling the tax code.
The dollar index against a basket of major currencies was a
shade lower at 96.624 following a slip to 96.515, its
lowest since Nov. 9.
The euro was little changed at $1.1267 after climbing
about 0.2 percent overnight.
The common currency was still shy of the seven-month high of
$1.1285 touched on Friday as a wait-and-see mood prevailed ahead
of the European Central Bank's policy meeting on Thursday,
another of this week's major events that the markets are bracing
While the ECB is not expected to shift rates or make changes
to its quantitative easing scheme this week, market participants
will sift through President Mario Draghi's statements for his
view on the euro zone economy.
Tempering expectations for the ECB to start planning an exit
from is easy policy, Draghi said last week that while euro zone
growth may be improving, inflation remains subdued and still
requires substantial stimulus.
"Of the three big events on 'Super Thursday,' the ECB
meeting could be the least disruptive as participants have
already had time to curtail their previously hawkish
expectations," said Ayako Sera, senior market economist at
Sumitomo Mitsui Trust.
"The remaining two, however, are political events. The
markets are at their current levels because these events are
simply difficult to read."
The pound was 0.1 percent lower at $1.2900 after
swerving between $1.2951 and $1.2873 the previous day.
Sterling has seen choppy trading on polls suggesting
outcomes ranging from a majority for Prime Minister Theresa
May's party to a 'hung' parliament in which no party has an
The Australian dollar added 0.45 percent to reach a
one-month high of $0.7544 after data showed the
resource-rich economy grew 0.3 percent in the first quarter,
dousing fears that its record expansion may have ended.
No such boost was available to the New Zealand dollar, which
traded flat at $0.7185. The kiwi was still close to a
three-month high of $0.7206 scaled the previous day on the
greenback's broad slide.
(Reporting by Shinichi Saoshiro; Editing by Shri Navaratnam)