* Aussie jumps after RBA tones down its weak currency views
* Canadian dollar recovers slightly from 11-year low
* Dollar just down vs euro, yen as commodity currencies
improve
(Updates throughout)
By Patrick Graham
LONDON, Aug 4 (Reuters) - Major currencies closely linked to
commodities prices recovered some ground on Tuesday after a
rough few weeks, as oil prices steadied and Australia's central
bank changed its tone.
The Aussie dollar rose 1.25 percent to an almost two-week
high after the Reserve Bank dropped a long-used reference in its
post-policy-meeting statement to a further decline of the
currency being necessary.
The New Zealand dollar, which often tracks the Aussie,
gained around half a percent, while the Canadian dollar, helped
by a steadying of prices for Brent and U.S. crude, clawed its
way back from an 11-year low of almost $1.32.
The dollar, euro and yen EUR= JPY= were all little
changed, with the dollar index against a basket of currencies
down 0.1 percent on the day. .DXY
"It's all been about the commodities units again this
morning," said a dealer with an international bank in London.
"There's been some recovery but I wouldn't hold my breath, the
outlook for them all still looks weak."
Oil sinking below $50 a barrel, allied to stock market
turmoil in China and continuing broader risks to world growth,
all make for a nervy backdrop to interest rate move by the U.S.
Federal Reserve later this year.
After seven years of zero or virtually zero official
borrowing costs in the world's main currency, a Fed hike will be
a shock for many economies, particularly in the developing
world. Concern about how that affects Chinese companies that
have borrowed heavily in dollars has weighed on commodities
prices and in turn on developed currency markets, on the Aussie,
kiwi, Canadian dollar and Norwegian crown.
"I wouldn't rush out to declare the four-year downtrend in
the Aussie against the dollar over, but it's not the most
attractive short looking forwards," said Kit Juckes, a
strategist with Societe Generale (PARIS:SOGN) in London.
"Since the Aussie peaked in July 2011, as well as falling by
a third against the dollar, it has fallen by 12 percent against
the kiwi for example, and AUD/NZD has a lot of upside as a
result now relative rates are moving in the Aussie's favour."
In early trade in Europe, the Aussie extended its gains to
1.4 percent on the day at $0.7395 AUD=D4 , recovering from a
six-year trough of $0.7234 set last week.
The Canadian dollar last traded at C$1.3118 per U.S. dollar
CAD=D4 , recovering from C$1.3176 - its lowest since August
2004.
"The longer that crude takes to recover, the greater the
risk to energy capex plans for 2016 which in turn feeds into the
Bank of Canada's projections and lowers the hurdle for further
easing down the line," said Elsa Lignos, senior currency
strategist at RBC Capital Markets.
"Next resistance targets for USD/CAD are 1.3246 and 1.3383
though it will take ongoing crude weakness to maintain the
USD/CAD rally." Crude prices were up by 0.7-1.0 percent.
LCOc1 CLc1
Dollar bulls are now counting on non-farm payrolls on Friday
to strengthen the chances of a September rate hike. The euro was
marginally higher at $1.0961.
(editing by John Stonestreet)