FOREX-Dollar pushes higher, eyes on inflation data

(Updates prices)

* Dollar still close to four-month lows

* Central bank comments hurt Aussie and yen

* Speculators continue to trim long dollar bets

* US data backs bets Fed will wait on rates; inflation key

By Patrick Graham

LONDON, May 18 (Reuters) - The dollar clawed its way higher on Monday, recovering from almost four-month lows reached late last week on another surprisingly bad round of U.S. economic data.

Against the euro, it rose 0.4 percent to $1.1404 , taking back a small portion of the single currency's more than 8 percent gain since April 13.

Strategists said country-specific factors allied to rising U.S. bond yields had helped deepen a correction that started late in the European afternoon on Friday.

"Short term, I think we go to $1.1350 today and, if the U.S. inflation numbers are better than expected at the end of the week, we could push on to as low as $1.1250," said Adam Myers, Head (Other OTC: HEDYY - news) of European FX strategy at Credit Agricole in London.

"There are a lot of people out there who think the Fed will not now hike this year. I still think the U.S. data will turn around and we'll get a (rate) move," Myers said.

Before Friday's U.S. data, there are final euro zone numbers for April on Tuesday as investors seek clues to the monetary policy balance over the next year.

U.S. industrial production fell for a fifth straight month in April and consumer confidence sagged in early May, quashing any remaining expectations that the U.S. central bank will begin raising rates as early as next month and backing the case that policymakers would hold off until September or December.

"Higher European bond yields have dragged the euro higher, but from our perspective, it just seems unsustainable," said Mitul Kotecha, head of currency strategy for Asia-Pacific at Barclays (LSE: BARC.L - news) in Singapore.

Data from the Commodity Futures Trading Commission released on Friday showed speculators further pared back their bullish dollar bets in the week ended May 12, pushing net long positions down for the seventh straight week to their lowest in nine months.

Against a basket of six major currencies, the dollar added about 0.3 percent to 93.230, after posting its fifth straight weekly decline. It had reached 92.133 on Thursday.

News of a capital gains tax on New Zealand property investments has added to rate-cut speculation there and made the kiwi the biggest loser among major pairs in recent days. The government on Sunday said that income gained on residential properties sold within two years of purchase would be taxed at up to 33 percent.

The kiwi dropped 0.75 percent to $0.7416. (Editing by Kevin Liffey)