FOREX-Currencies calm before China PMI, Aussie on inflation watch

* G3 currencies becalmed in absence of any major economic news

* Survey on China's manufacturing sector key for risk sentiment

* Aussie dollar eyes inflation data at home

By Ian Chua

SYDNEY, April 23 (Reuters) - The world's major currencies started trade on Wednesday in Asia on familiar ground after an uninspired session that kept the dollar, euro and yen locked in narrow ranges.

The euro last traded at $1.3806, having drifted up from a near two-week low of $1.3785. Against the yen, the common currency firmed a touch to 141.65, while the dollar was flat at 102.60.

The dollar index on Tuesday traded within the previous day's range, suggesting a lack of conviction. It last stood at 79.891.

There was no major economic data out of Europe, while in the United States, home resales fell to their lowest in over a year in March although there were signs the downtrend may be coming to an end.

In Asia much will depend on a survey of China's manufacturing activity due at 0045 GMT. Any disappointment will add to worries about the country's economic slowdown and sour risk sentiment, perhaps to the benefit of the yen.

The Australian dollar, which gained a modest 0.4 percent against the greenback, was the clear outperformer as investors positioned for local inflation data due out at 0030 GMT.

It bought $0.9363, about half a U.S. cent above this week's trough.

The headline inflation number is expected to come in above the central bank's 2-3 percent target for the first time in over two years, while underlying inflation is likely to challenge the top-end of the range.

"The consensus is for the trimmed and weighted means to increase to 2.9 percent, the first time since 2010 that either series would be threatening the upper-end of the RBA's 2-3 percent target range," JPMorgan analysts wrote in a note to clients.

"As such it should serve to reinforce the RBA's more relaxed attitude of late towards the level of the currency, which has been a key ingredient in the AUD's recovery. We continue to recommend a tactical long in AUD/NZD."

Analysts said a stronger-than-expected outcome could also prompt the market to bring forward the risk of an interest rate hike. Bank bill futures currently imply a one-in-three chance of a move by December.

Demand for the higher-yielding Aussie and its kiwi peer were further supported by low market volatility as well as gains in global equities. U.S. stocks ended higher for a sixth session thanks in part to a host of solid earnings report. (Editing by Shri Navaratnam)