- Dollar slips, upward momentum loses traction

- Euro/dollar recovers losses, but stays below 14-mth high

- Analysts expect currency consolidation before U.S. data (Updates prices)

By Naomi Tajitsu

LONDON, Oct 27 (Reuters) - The dollar slipped against the euro on Tuesday as traders took a breather from steep gains made in the U.S. currency the previous day which had knocked the euro from a 14-month high.

With few major economic data and events in the European session, the dollar hovered in narrow ranges in quiet trade. Some in the market said a rise in U.S. government bond yields helped to boost the dollar on Monday.

Analysts said the market was aware short positions in the dollar have piled up in past weeks, signalling the possibility of a rebound in the U.S. currency. [IMM/FRX]

Still, they added that the trigger for such a turnaround had yet to materialise.

We've had a good, long run in dollar weakness so the market needs to take profits, said Peter Frank, currency strategist at Societe Generale in London.

The market is positioned for a dollar bounce-back but we need a catalyst for that ... We didn't see one on Monday.

Analysts said the market's voracious appetite for risk seen in past months -- which has battered the dollar across the board -- may be cooling down, and that traders may be waiting for U.S. third-quarter economic growth figures later in the week to determine the currency's direction in the near term.

By 1200 GMT, the euro was up 0.1 percent on the day at $1.4873, but remained well below $1.5064 hit on Monday, its highest since August 2008.

The euro stumbled nearly a full percent against the dollar on Monday, and some analysts said the euro's retreat from its 14-month peak had been driven by the single currency's inability to sustain its rally above the psychologically key $1.50 region.

The euro remained on the back foot as European banking shares came under selling pressure after news that Dutch financial institution ING will be split in two and launch a rights issue to repay some state aid. [ID:nLR394138]

The dollar fell 0.2 percent to 91.98 yen, retreating from a one-month high of 92.33 yen hit in earlier trade.

The dollar index .DXY, a measure of its performance against six other major currencies, fell 0.2 percent to 75.940, but stayed above a 14-month low of 74.94 hit last week.

The high-yielding Australian dollar inched up around 0.2 percent against its U.S. counterpart.

Data was thin on the ground on Tuesday but market participants were awaiting the S&P Case/Shiller home price index for August due at 1300 GMT and the Conference Board's report on consumer confidence for October at 1400 GMT. ECONUS


The Norwegian crown hovered near a one-week low against the euro, as traders trimmed some long positions in the Nordic currency before the Norges Bank is expected to raise interest rates on Wednesday. [ID:nLK376134]

Analysts said the crown may resume its broad rally if the Norges emphasises improving fundamentals and increasing inflation risks as reasons for hiking rates.

The dollar's rally on Monday was helped by a rise in the 10-year Treasury yield on speculation the Federal Reserve may signal a tightening in monetary policy down the road, while the market also fretted about a record debt sale this week.

The 10-year Treasury yield US10YT=RR rose as high as around 3.58 percent, its highest since late August, and expanded the U.S./euro zone government debt yield spread to its widest in two months, raising some appeal of dollar-denominated assets.

But dollar gains quickly sputtered as the rise in yields lost some momentum.

... even at these levels, yields aren't high enough for a sustained dollar rally, said Marcus Hettinger, global currency strategist at Credit Suisse in Zurich. (Editing by Victoria Main)