LONDON, Aug 5 (Reuters) - The yen edged up on Wednesday as traders locked in profits from gains in currencies perceived to be higher-risk, while the euro hovered below its strongest level of 2009 hit against the dollar early in the week.
The dollar was little changed against a currency basket as the safe-haven U.S. currency found its footing after plumbing its weakest level of the year on Monday due to escalating risk demand, but risks were seen tilted in favour of more selling.
Sterling clocked a nine-month high versus the dollar on strong UK services sector data, but overall, investors were hesitant to take on big positions before policy decisions by the European Central Bank and the Bank of England on Thursday, which may offer more clues on their plans for quantitative easing.
"A lot of objectives in cross/yen have been reached," said Neil Jones, head of European hedge fund sales at Mizuho Corporate Bank in London, noting that the Australian dollar had breached 80 yen, while sterling/yen has rallied above 160 yen.
"As a result we're seeing some profit taking," he said.
The euro offered limited reaction to purchasing managers' indices for euro zone services sectors, which generally showed improvement in July. [ID:nLAG003648]. Traders also brushed off a bigger-than-expected fall in retail sales in the region in June.
At 0946 GMT, the euro EUR= slipped a touch to $1.4385, but stayed near $1.4445 hit on Monday, its strongest since December.
Against the yen, the euro EURJPY=R slipped 0.1 percent to 136.95 yen, retreating from around 137.70 yen hit on Tuesday, its highest in nearly two months.
The dollar JPY= was down 0.1 percent at 95.15 yen.
The pair barely budged after comments from China's central bank on Wednesday said it would keep a close eye on currency moves and make the yuan more flexible. [ID:nBJC000426]
The dollar index .DXY was flat at 77.752, not far from 77.451 hit on Monday, its lowest since September. Continued...
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