By Jamie McGeever LONDON (Reuters) - The euro touched a new high for the year against the dollar on Friday, taking out options barriers at $1.5050, before easing back ahead of a batch of European data that should give the market clearer direction. Euro zone purchasing managers indices, the Ifo index of German business morale, and preliminary British third quarter gross domestic product data will likely determine whether or not the euro and sterling retain their strength against the dollar. The dollar was up on a trade-weighted basis mainly on its gains against the yen, which was under growing selling pressure on the back of unfavorable U.S-Japanese yield spread moves and an accumulation of domestic factors. The country's banking minister said Japan needed a second extra budget worth around 10 trillion yen and expectations grew that government debt would rise and a privatization scheme be revised, pushing the dollar up to options barriers at 92 yen. But the focus was firmly on the European data releases. "Currencies will be mostly affected by the series of European data this morning," said Roberto Mialich, FX strategist at Unicredit in Milan. "There is still upside potential for the euro today...but probably at a slower speed than we've seen so far. The fact it has struggled around $1.50 indicates the market might be a bit cautious about riding on the euro rally at the same speed as recent weeks," he said. At 0715 GMT the euro was little changed on the day at $1.5015, having earlier hit a 14-month high at $1.5061. The euro crossed a psychological barrier at $1.5000 this week and traders said the next set of options triggers were thought to lie around $1.5050. These were duly tested and the level broken. The dollar index, a measure of its value against six major trading partner currencies, was up 0.2 percent on the day at 75.22 .DXY. The dollar was up half a percent against the yen at 91.84 yen, having hit its highest in a month earlier in Asia at 91.92 yen. The spread between 10-year U.S. and Japanese government bond yields widened to 210 basis points in favor of the dollar, making U.S. bonds more attractive to Japanese investors. Earlier this week that yield advantage was 196 basis points. Sterling was up 0.2 percent against the dollar at $1.6655, having earlier hit a one-month high of $1.6677, and up around a third of a percent against the euro at 90.10 pence per euro. The pound also hit its highest in a month against the dollar, extending a steep rebound from a five-month low earlier in October as short-term speculators have covered short positions. One trader said the short-covering looked to be nearly over but had given the pound more upward drive ahead of GDP data due at 0830 GMT, which may show Britain returned to growth between July and September after five quarters of recession.

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