SINGAPORE, Aug 24 (Reuters) - The dollar nursed losses against Asian currencies on Thursday, after softer-than-expected global economic data muddied the interest rate outlook and pushed down U.S. yields ahead of the Federal Reserve's Jackson Hole symposium.
The Australian dollar, which had been taking a battering on signs of China's slowdown and resilience in the U.S., jumped 0.9% on Wednesday after U.S. manufacturing and services PMIs missed expectations.
It held those gains on Thursday, as did the New Zealand dollar and, for the most part, the Japanese yen and emerging market currencies in Asia.
"PMI data suggests that the outlook is not as great as one would hope and that might suggest some caution on the part of developed market central banks in terms of further tightening," said Bank of Singapore currency strategist Moh Siong Sim.
"It's definitely good news for the risky assets and bad news for the dollar."
U.S. business activity growth was its weakest since February as the economy seems to be starting to stall, August data published on Wednesday showed.
Ten-year U.S. yields tumbled 13 basis points (bps) to 4.198% on the news, their sharpest one-day slide in more than three months, taking some of the heat out of recent rises.
Europe's manufacturing output continued to shrink and services activity fell into decline, surveys showed, dampening any boon for the euro, which steadied at $1.0866 in Asia.
British factory output slumped, leaving the economy on course for recession and sending the pound on a round trip that finished near where it began at $1.2719.
The dollar index, which measures the greenback against a basket of six major currencies remains higher for the month, but dipped about 0.2% on Wednesday and was flat at 103.39 through the Asia session.
The New Zealand dollar was a touch softer at $0.5968, as was the yen at 145.17 per dollar, though moves were small as traders were cautious in case of possible surprises that could lift the dollar when Fed Chair Jerome Powell speaks at Jackson Hole on Friday.
"Powell (will have) the opportunity to hone the data-dependency message from the July minutes, and possibly prepare investors for the forecast upgrade that is likely at the September Fed meeting," said BNY Mellon Investment Management's head of U.S. macro, Sonia Meskin.
"We believe investors may be underpricing the potential for further hikes this year, because no further hikes in 2023 would be inconsistent with the growth outlook upgrade," she said.
Elsewhere in Asia, emerging market currencies made gains or hung on to overnight moves.
China's yuan, which has been supported by state-bank buying in recent sessions, gained modestly along with a bounce in Chinese stocks to hit 7.2690 per dollar.
(Reporting by Tom Westbrook Editing by Shri Navaratnam and Kim Coghill)
