FOREX-Dollar droops on strong euro-zone data, Swiss bank rules

(Adds quotes, changes byline)

* Dollar falls vs Swiss franc after new bank regulations

* Euro helped by short squeeze, German and French surveys

* Canadian dollar falls to 4-1/2-year low; Aussie slumps

By Michael Connor

NEW YORK, Jan 23 (Reuters) - The dollar dropped more than 1 percent against the euro and the Swiss franc on Thursday, hurt by robust euro-zone economic data and tougher bank capital requirements in Switzerland, which suggest a tightening of monetary conditions there.

The dollar touched a three-week low against the Swiss franc and recorded its biggest single-day slump against the Swiss currency since late May.

The dollar index .DXY , which measures the greenback against six major currencies, declined nearly 1 percent even as U.S. economic reports showed only a small rise in weekly jobless claims and U.S. existing home sales rose 1 percent in December after three months of declines.

"U.S. data was upstaged by the economic reports coming out of Europe. Jobs and housing fell short of expectations, while the numbers out of the euro zone topped forecasts," said Joe Manimbo, senior market analyst at Western Union Business Solutions.

Purchasing manager indexes rose across the euro zone, led by Germany. The gains fed hopes the bloc is emerging from its long debt crisis. News Search ID:nL9N0IM047

The Swiss franc, which has declined 4 percent against the U.S. dollar in the last six months, got a lift on Thursday from the bank capital changes because they may hint at a tighter monetary policy by the Swiss government, Manimbo said.

News Search ID:nL5N0KX0DQ

"When we are in a world of seemingly endless loosening (by central banks), tightening stands out," Manimbo said.

The dollar also fell sharply against the yen, following a weak Chinese manufacturing number. Soft factory data from China sent Asian stocks lower, losses that persisted in Europe and Wall Street and boosted demand for the safe-haven yen.

In late trading, the euro was at $1.3692 EUR= after climbing as high $1.3698, matching a high set on Jan 14.

"With the market of the view that the European Central Bank is going to be conservative when it comes to monetary policy easing, strong manufacturing data just pushes further back the possibility of any unconventional policy, which tends to lift the euro," said Shahab Jalinoos, currency strategist at UBS in Stamford, Connecticut.

The dollar was down 1.6 percent against the Swiss franc to 0.897 franc CHF= . It fell as low as 0.8964 franc. The euro was 0.5 percent lower at 1.2288 francs EURCHF= .

In making its policy change, the Swiss government cited "a considerable risk for the stable development of the economy" driven by strong growth in mortgage loans and residential property prices.

"This clearly shows the (Swiss National Bank) is on a path where it can get more restrictive," said Ulrich Leuchtmann, head of currency research at Commerzbank in Frankfurt.

"It limits the upside potential for euro-Swiss franc," he added. "I don't think they'll abandon the 1.20 (per euro cap on the franc's value) but there will be enough speculation in the market about how long it can continue."

Against the yen, the dollar in late trading was off 1.3 percent at 103.13 yen JPY= . The yen drew safe-haven bids after China's flash Markit/HSBC PMI index fell to 49.6 in January from December's 50.5, suggesting a mild slowdown at the end of 2013 has continued into the new year. News Search ID:nL3N0KX138

Against commodity currencies, the U.S. dollar fared better.

Comments from the Bank of Canada, which said currency depreciation should help exports, knocked the Canadian dollar to a 4-1/2-year low . The U.S. dollar was last 0.2 percent higher at C$1.1106.

The Australian dollar, meanwhile, tumbled to a 3-1/2-year low, weighed by the weak Chinese data. It was last at US$0.876, down 1 percent.

(Addtional reporting by Gertrude Chavez-Dreyfuss; Editing by Leslie Adler)

((michael.connor@thomsonreuters.com)(305 810 2696)(Reuters Messaging: michael.connor.reuters.com@reuters.net))

 
((Currency bid prices at 04:01PM (2101 GMT) 
Description    RIC    Last    U.S. Close 
 Previous  
 Session    Pct Change    YTD Pct 
 Change    High Bid    Low Bid 
Euro/Dollar    EUR=    $1.3692    $1.3546    +1.08%    -0.39%    +1.3698    +1.3531 
Dollar/Yen    JPY=    103.1800    104.5100    -1.27%    -1.87%    +104.8300    +102.9800 
Euro/Yen    EURJPY=    141.29    141.55    -0.18%    -2.64%    +142.4100    +141.0500 
Dollar/Swiss    CHF=    0.8973    0.9112    -1.53%    +0.50%    +0.9133    +0.8964 
Sterling/Dollar    GBP=    1.6632    1.6574    +0.35%    +0.46%    +1.6635    +1.6559 
Dollar/Canadian    CAD=    1.1097    1.1083    +0.13%    +4.49%    +1.1173    +1.1082 
Australian/Dollar    AUD=    0.8762    0.8851    -1.01%    -1.69%    +0.8852    +0.8733 
Euro/Swiss    EURCHF=    1.2291    1.2345    -0.44%    +0.16%    +1.2361    +1.2277 
Euro/Sterling    EURGBP=     0.8234    0.8172    +0.76%    -0.76%    +0.8247    +0.8173 
NZ Dollar/Dolar    NZD=    0.8300    0.8308    -0.10%    +1.15%    +0.8338    +0.8263 
Dollar/Norway    NOK=    6.0855    6.1614    -1.23%    +0.32%    +6.1715    +6.0846 
Euro/Norway    EURNOK=    8.3356    8.3524    -0.20%    -0.04%    +8.3695    +8.3287 
Dollar/Sweden    SEK=    6.4061    6.4824    -0.13%    -0.25%    +6.4883    +6.4068 
Euro/Sweden    EURSEK=    8.7726    8.7837    -0.13%    -1.05%    +8.8031    +8.7632 
     
     
All spots FX=  
Tokyo spots AFX=  
Europe spots EFX=  
Volatilities FXVOL=  
Tokyo Forex market info from BOJ TKYFX World central bank news CEN 
Economic Forecasts... ECON   Official rates...INT/RATE 
Forex Diary.......MI/DIARY   Top events........M/DIARY 
Diaries...........DIARY Diaries Index........IND/DIARY 
Press Digests.....PRESS Polls on G7 economies..SURVEY/ 
European markets......MARKETS/))))

Keywords: MARKETS FOREX