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FOREX-Sterling, commodity currencies shine as solid data stoke risk appetite

* Aussie hits 8-mth highs after RBA sticks to steady rates message

* Sterling flirts with six-year highs on upbeat manufacturing report

* Yellen speaks later Wednesday, ECB rate decision & US payrolls loom

TOKYO/SYDNEY, July 2 (Reuters) - The British pound held firm near six-year highs following an upbeat manufacturing survey while the yen and the euro lost steam as the uptick from quarter-end buying faded.

Commodity currencies outperformed other major rivals thanks to high commodity prices and increased risk appetite, reflected in surging equities worldwide.

Investors warmed to sterling after a survey showing British manufacturing growing at its fastest in seven months added to the case for a rise in interest rates this year, well ahead of the United States.

The pound, which scurried to $1.7167 on Tuesday, its highest since October 2008, traded firm at $1.7148. A return to $1.7322 will mark its 50 percent retracement of the late-2007 to early-2009 tumble from $2.1162 to $1.3500.

Sterling also held near a 1-1/2-year high against the euro, which changed hands at 79.765 pence, near the low of 79.59 set last month.

The euro lost steam partly as quarter-end buying by euro zone exporters have now been completed, traders said.

The common currency slipped to $1.3677 from a six-week high of $1.3710 on Tuesday while the dollar index drifted up to 79.837 from a two-month trough of 79.740.

Traders also said there were some worries among euro bulls that the European Central Bank (ECB) might try to talk down the currency on Thursday after its policy meeting.

The euro has gained about 2 U.S. cents in three short weeks, a move that is likely to frustrate the ECB. President Mario Draghi recently warned that a strengthening currency in a low inflation environment was cause for serious concern.

Still, with the ECB unlikely to inject more stimulus a month after delivering wide-ranging measures, analysts said the euro shouldn't fall too far.

"On EUR/USD, the medium-term view is still one of a lower exchange rate given the monetary policy divergence," analysts at JPMorgan wrote in a note to clients.

The end of quarter-end buying also hit the yen, which slipped from six-week high to 101.60 yen to the dollar from Tuesday's low of 101.29.

On the other hand, commodity currencies such as the Canadian dollar and the Australian dollar flew higher, drawing support from higher commodity prices, rising risk appetite and their respective central bank's policy stance.

The Canadian dollar hit a six-month low of C$1.0628 to the U.S. dollar on Wednesday, helped by recent rise in commodity prices.

"Some real-money investors are buying the Canadian dollar. It now looks like a good place to be for investors who want to capitalise on rise in commodities but at the same time who do not want to increase exposure to emerging markets such as Brazil or China," said a trader at a Western bank in Tokyo.

Meanwhile, the Reserve Bank of Australia on Tuesday kept Aussie bears at bay by sticking to its message that rates will remain steady.

"There were some expectations that the RBA might, if it wanted to, be more dovish on some sectors of the economy, but they were not and AUD broke above the year's highs," said Emma Lawson, senior currency strategist at National Australia Bank in Sydney.

The Aussie jumped almost a cent to above 95 U.S. cents for the first time since early November.

It ceded some gains on Wednesday after a surprise widening in the Australian trade deficit in May due to slump in exports. The Aussie fetched $0.9456, still up 0.7 percent so far this week.

With little in the way of major data from Asia, focus will switch to Federal Reserve Chair Janet Yellen's speech later in the day on "Financial Stability", at an event hosted by International Monetary Fund Director Christine Lagarde.

(Editing by Shri Navaratnam)