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FOREX-Dollar falls vs yen, euro after soft U.S. economic data

* U.S. economic data disappoints, weighs on dollar

* Euro helped by firm euro zone business activity

* Graphic: World FX rates in 2019 http://tmsnrt.rs/2egbfVh

(Recasts, adds new comment, U.S. data, FX table, updates

prices, changes byline, dateline; previous LONDON)

By Gertrude Chavez-Dreyfuss

NEW YORK, Feb 21 (Reuters) - The U.S. dollar fell against

most major currencies on Thursday, hurt by weaker-than-expected

U.S. economic data that affirmed expectations the Federal

Reserve will hold interest rates this year.

The greenback so far this week has fallen 0.4 percent, after

gaining more than 1 percent the previous week, highlighting an

uneven performance amid a mixed batch of U.S. economic reports.

The U.S. data came a day after minutes of the Fed's monetary

policy last month said patience was needed when it came to

tightening rates, noting a pause in rate hikes gave it time to

observe the effects of past increases amid a global economic

slowdown.

New (KOSDAQ: 160550.KQ - news) orders for key U.S.-made capital goods, in particular,

unexpectedly fell in December, data showed on Thursday, amid

declining demand for machinery and primary metals, pointing to

sluggish business spending on equipment that could crimp

economic growth.

"Overall, the durable goods data provide further reason to

think that economic growth will soon slow to below its 2 percent

potential pace, which will keep the Fed on hold throughout this

year," said Andrew Hunter, senior U.S. economist, at Capital

Economics in London.

Thursday's data also showed that Philadelphia Fed's

manufacturing activity index dropped to a reading of -4.1 this

month from 17.0 in January. That was the first negative reading

since May 2016.

In mid-morning trading, the dollar fell 0.2 percent against

the yen to 110.63 yen, sliding for the first time in five

days.

The euro also inched higher versus the dollar, up 0.1

percent at $1.1343.

The single European currency benefited from surveys that

showed business activity was surprisingly firm in February,

particularly in France.

French business activity rose more than expected as

manufacturing growth helped offset the slack in services that

has dogged firms in the wake of anti-government protests, though

the German PMI number was more of a mixed picture.

"The euro's reaction highlights the heightened sensitivity

of the currency towards any good news from Europe after recent

lackluster data," said Kamal Sharma, director of G10 FX strategy

at Bank of America Merrill Lynch in London.

A bunch of weak data since January has undermined support

for the single currency, prompting investors to revise down

their inflation expectations for the coming months and pulled

core bond yields lower.

A Citibank economic surprise index shows the euro zone

indicator is still wallowing near six-month lows hit last month.

The dollar index, which measures the U.S. unit against a

basket of six major currencies, was little changed at 96.498

.

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Currency bid prices at 10:05AM (1505 GMT)

Description RIC Last U.S. Close Pct Change YTD Pct High Bid Low Bid

Previous Change

Session

Euro/Dollar EUR= $1.1342 $1.1335 +0.06% -1.11% +1.1366 +1.1321

Dollar/Yen JPY= 110.6600 110.8500 -0.17% +0.36% +110.8700 +110.5800

Euro/Yen EURJPY= 125.52 125.67 -0.12% -0.55% +125.8500 +125.3300

Dollar/Swiss CHF= 1.0007 1.0008 -0.01% +1.97% +1.0022 +0.9998

Sterling/Dollar GBP= 1.3055 1.3049 +0.05% +2.34% +1.3094 +1.3027

Dollar/Canadian CAD= 1.3181 1.3174 +0.05% -3.34% +1.3207 +1.3162

Australian/Doll AUD= 0.7092 0.7163 -0.99% +0.61% +0.7207 +0.7087

ar

Euro/Swiss EURCHF= 1.1352 1.1349 +0.03% +0.87% +1.1368 +1.1344

Euro/Sterling EURGBP= 0.8685 0.8685 +0.00% -3.33% +0.8703 +0.8666

NZ NZD= 0.6816 0.6855 -0.57% +1.47% +0.6876 +0.6806

Dollar/Dollar

Dollar/Norway NOK= 8.6222 8.5895 +0.38% -0.19% +8.6441 +8.5813

Euro/Norway EURNOK= 9.7809 9.7382 +0.44% -1.26% +9.7914 +9.7368

Dollar/Sweden SEK= 9.3520 9.3203 +0.36% +4.33% +9.3637 +9.3034

Euro/Sweden EURSEK= 10.6075 10.5692 +0.36% +3.36% +10.6311 +10.5591

(Reporting by Gertrude Chavez-Dreyfuss; Additional reporting by

Saikat Chatterjee in London; Editing by Bernadette Baum)