* Commodity currencies hit hard this week by oil price slide
* Euro and yen relatively quiet in contrast
* But risk aversion seen supporting such funding currencies
(Updates prices, adds comments)
By Masayuki Kitano and Ian Chua
SINGAPORE/SYDNEY, Dec 9 (Reuters) - The currencies of major
commodity producers such as Australia and Canada steadied on
Wednesday, letting them nurse big losses suffered the past two
days from a selloff in oil and bulk commodities.
Most of the action this week has been confined to commodity
currencies after OPEC members failed on Friday to agree on an
oil production ceiling, triggering a renewed selloff in oil.
The slide in commodities has dampened investors' risk
appetites, lending some support to low-yielding funding
currencies such as the euro and the yen this week, although
their moves have been relatively modest.
The euro last traded at $1.0901 EUR= , up 0.1 percent on
the day, having pulled up from Tuesday's low around $1.0830.
"Every time we see risk aversion, we see the market paring
back short euro positions, short yen positions," said Jesper
Bargmann, head of trading for Nordea Bank in Singapore, adding
that any weakness in European equities could trigger such
short-covering in the euro.
Still, the euro's moves this week have been very mild
compared with last Thursday's 3.1 percent surge after the
European Central Bank disappointed with a modest easing.
The dollar eased 0.1 percent against the yen to 122.77 yen
JPY= , having pulled back from Tuesday's high near 123.40 yen.
"The main focus for markets remained oil prices and
equities, with the CRB index hitting fresh 13-year lows
overnight and oil prices touching seven-year lows," analysts at
ANZ wrote in a note to clients, referring to the Thomson
Reuters/CoreCommodities CRB index .TRJCRB .
Commodity currencies gained a bit of respite on Wednesday as
oil prices edged higher, although the Canadian dollar and
Norwegian crown were still wallowing near their lowest levels in
over 10 years against the greenback.
The U.S. dollar was last at C$1.3575 CAD=D4 , having risen
on Tuesday to as high as C$1.3623, the weakest level for the
Canadian dollar since mid-2004.
Against the Norwegian crown, the greenback last stood at
8.7486 crowns NOK= , having scaled a 13-year peak of 8.8194
crowns on Tuesday.
The Australian dollar held steady at $0.7215 AUD=D4 .
There was limited reaction to data showing China's consumer
inflation picked up slightly in November.
The New Zealand dollar slipped 0.2 percent to $0.6628
NZD=D4 . Uncertainty over whether the Reserve Bank of New
Zealand would cut interest rates on Thursday has kept investors
wary.
(Editing by Richard Borsuk)