By Sumeet Desai LONDON, June 11 - The dollar held steady against the euro on Tuesday, less than half a cent above 17-month lows hit last week, as dealers, now more intent on the World Cup, took stock of the greenback's two percent fall this month. The dollar also remained trapped in a narrow range against the Japanese currency, holding around two yen above recent six-month lows, as investors remained wary that any further yen strength would be met with Japanese intervention. "It's encouraging the dollar seems to have stabilised. We're in a period of consolidation," said Mitul Kotecha, head of foreign exchange research at Credit Agricole Indosuez. "The market is still very short of dollars." At 0730 GMT, the euro was at $0.9453 little changed from late U.S. levels. It also fetched 117.79 yen , barely changed. The dollar shed some early gains against the yen to trade around 124.60 yen after rising to a high of 124.83 in Tokyo as traders adjusted long positions after an upside test failed due to heavy yen orders by Japanese exporters.
MARKET CAUTIOUS
Dealers said activity was thin as trading floors preferred to concentrate on the World Cup soccer tournament, which is now fully underway. "I think the market is cautious of position adjustments in the euro after its recent rise against the dollar," said Noriyuki Kato, head of foreign exchange ING in Tokyo. "There is no question that the euro is bullish so once that is cleared I think we can expect the euro to start moving towards the key level of 95.95 cents," Kato said. Traders said they were waiting for a series of U.S. economic indicators including retail and producer price data scheduled for release later this week but questioned whether that could change the current bearish dollar trend. "Any good news from the U.S. is quickly discounted," said Kotecha. Germany's ZEW economic sentiment survey will be released later in the session.