FOREX-Dollar steady in subdued market as key events loom

Reuters

* G3 currencies little changed in quiet start to the week

* Yellen's testimony, BOJ, Chinese data, earnings feature this week

* Aussie dollar wary after Stevens again talks down currency

By Ian Chua

SYDNEY, July 14 (Reuters) - The dollar, euro and yen started trade on Monday pretty much where they closed last week with investors awaiting pivotal events including Federal Reserve Chair Janet Yellen's congressional testimony for fresh cues.

A policy review by the Bank of Japan on Tuesday, a batch of Chinese economic data on Wednesday and earnings results from major global banks this week all but ensured a nondescript start for Asia.

The dollar index was steady around 80.200, a level it has gravitated towards since recovering from a two-month low of 79.740 set on July 1. The euro bought $1.3604, having traded on either side of $1.3600 in the past week.

Against the yen, the greenback fetched 101.37 holding off a seven-week trough of 101.06 plumbed last Thursday. The euro was near 138.00 yen, recovering from last week's fall to a five-month low of 137.50.

Demand for the safe-haven yen faded on Friday as concerns eased about the health of Portugal's largest bank and its impact on the euro zone financial system.

Traders said dollar bulls are unlikely to get too excited ahead of Yellen's testimony on Tuesday and Wednesday.

"If her recent public statements are any indication, expect no discomfort from the current stance of accommodative monetary policy," analysts at JPMorgan wrote in a note to clients.

They also expect Yellen to defend the principle that financial stability should remain primarily in the remit of regulators, while central banks should focus on macroeconomic stability.

The Australian dollar, meanwhile, kept its head down after the country's central bank chief again said the currency was too high.

In an interview with the Weekend Australian published late last week, Reserve Bank of Australia Governor Glenn Stevens reiterated that some investors may be underestimating the risk of "a material decline" in the currency at some point.

The Aussie last traded at $0.9384, having dipped as low as $0.9370, from Friday's late $0.9390. Similar remarks from Glenn Stevens early this month saw the Aussie slide as far as $0.9327.

There are no major data out of Asia on Monday. European Central Bank President Mario Draghi is scheduled to give an introductory statement at the quarterly hearing before the Committee on Economic and Monetary Affairs of the European Parliament later in the day.

(Editing by Eric Meijer)

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