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FOREX-Dollar softens despite upbeat U.S. data, Fed chair talk

* Home sales, durable goods data fail to lift greenback Support seen for Taylor as Fed chief limits drop for dollar

* Canada dollar hits 10-week low after BOC leaves rates steady

* Sterling jumps on stronger-than-expected GDP data

(Updates market action; changes dateline, previous LONDON) NEW YORK, Oct 25 (Reuters) - The dollar dipped on Wednesday against a basket of currencies, struggling to post further gains tied to speculation the next chair of the U.S. Federal Reserve will steer policy in a more hawkish direction. Profit-taking on the greenback emerged as the dollar staged bounces following releases of surprisingly strong data on durable goods orders and new home sales in September, analysts said. "The dollar has faded against data that were very good," said Greg Anderson, global head of FX strategy at BMO Capital Markets in New York. New orders for U.S. capital goods rose more than forecast by 2.2 percent last month, while new home sales unexpectedly jumped to a near 10-year high in September. Sterling climbed almost 1 percent against the dollar to an eight-day high of $1.3259 after stronger-than-expected U.K. growth data cemented expectations the Bank of England will raise interest rates next week. The Canadian dollar fell to a 10-week low at C$1.2775 to the greenback after the Bank of Canada as expected left key overnight interest rates unchanged. Despite Wednesday's pullback, the dollar index has gained 0.6 percent in the past week in the aftermath of reports that Stanford University economist John Taylor impressed U.S. President Donald Trump in his interview for the Fed's top post.

Taylor favors a rule-based approach to setting interest rates and is seen as someone who may put the Fed on a path of faster interest rate increases compared with Fed Chair Janet Yellen, whose term expires next February. Trump's other possible nominees to head the Fed include Yellen, Fed Governor Jerome Powell, his economic adviser Gary Cohn and former Fed Governor Kevin Warsh. Trump is expected to announce his Fed chair candidate before his Asian trip in early November. At 11:00 a.m. (1500 GMT), the index tracking the greenback versus six currencies was down 0.1 percent at 93.68, holding below a 2-1/2 week high of 94.017 set on Monday. The dollar climbed to 114.245 yen, its highest since July 11 , following Sunday's victory for Prime Minister Shinzo Abe, whose ultra-loose policy should keep pressure on the yen. Australia's dollar tumbled almost 1 percent against its U.S. counterpart, to a 3-1/2-month low of $0.7699 after third-quarter consumer price readings fell short of forecast, reducing expectations of the country's central bank to raise interest rates in the coming months. The euro gained 0.4 percent at $1.181 before Thursday's European Central Bank policy meeting, prompted by expectations it would announce the start of trimming its monthly asset purchases to 40 billion euros from 60 billion euros in January.

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Currency bid prices at 11:13AM (1513 GMT)

Description RIC Last U.S. Close Pct Change YTD Pct High Bid Low Bid Previous Change

Session

Euro/Dollar EUR= $1.1805 $1.1759 +0.39% +12.29% +1.1817 +1.1754 Dollar/Yen JPY= 113.6500 113.8900 -0.21% -2.76% +114.2400 +113.5700 Euro/Yen EURJPY= 134.16 133.94 +0.16% +8.95% +134.4800 +133.7600 Dollar/Swiss CHF= 0.9891 0.9909 -0.18% -2.82% +0.9939 +0.9887 Sterling/Dollar GBP= 1.3258 1.3134 +0.94% +7.47% +1.3270 +1.3111 Dollar/Canadian CAD= 1.2792 1.2673 +0.94% -4.75% +1.2794 +1.2658 Australian/Doll AUD= 0.7698 0.7775 -0.99% +6.69% +0.7784 +0.7698

ar

Euro/Swiss EURCHF= 1.1678 1.1654 +0.21% +8.97% +1.1705 +1.1641 Euro/Sterling EURGBP= 0.8904 0.8955 -0.57% +4.53% +0.8973 +0.8879 NZ NZD= 0.6862 0.6900 -0.55% -1.14% +0.6912 +0.6862

Dollar/Dollar

Dollar/Norway NOK= 8.0258 8.0026 +0.29% -7.08% +8.0333 +7.9943 Euro/Norway EURNOK= 9.4750 9.4161 +0.63% +4.28% +9.4846 +9.4133 Dollar/Sweden SEK= 8.2235 8.2192 +0.42% -9.71% +8.2572 +8.2071 Euro/Sweden EURSEK= 9.7100 9.6693 +0.42% +1.36% +9.7165 +9.6690

(Additional reporting by Jemima Kelly in London, Masayuki Kitano in Singapore and Wayne Cole in Sydney; Editing by Jon Boyle and Chris Reese)