(Corrects to add missing word in headline.)
* Crude oil rebound also helps AUD pull away from 2-1/2-month low
* Sterling gains, moving away from 3-month low
* Yen steady as weekend G7 meeting in Japan awaited
By Lisa Twaronite
TOKYO, May 17 (Reuters) - The dollar edged down slightly in Asian trading on Tuesday, while the Australian dollar soared after central bank minutes reduced expectations of an interest rate cut.
The Aussie was already bolstered by a rebound in crude oil futures. U.S. crude hit a six-month high, as the market focused on supply disruptions that prompted long-time bear Goldman Sachs (NYSE:GS) to issue a more bullish assessment. O/R
Minutes of the Reserve Bank of Australia's (RBA) May policy meeting, at which policymakers reduced the cash rate by a quarter point to a record low 1.75 percent, were less dovish than some had anticipated. Aussie was up 0.8 percent at $0.7349 AUD=D4 after rising as high as $0.7368, pulling decisively away from a two-and-a-half month low of $0.7236 plumbed in the previous session.
"The fact that they discussed waiting for more info before cutting in May suggests there is a very low chance of an early follow up, and the chance (of a rate cut) in August should be reduced," said Shinichi Kashiwagi head of market sales for Japan at National Australia Bank in Tokyo.
Use of the word "persuaded" in the minutes suggests some members needed to be convinced that an easing would improve prospects for sustainable growth and inflation returning to target over time, he said.
The dollar index, which tracks the U.S. currency against a basket of six rivals, edged down 0.1 percent to 94.450 .DXY , inching away from a three-week high of 94.845 hit on Friday.
The yen was relatively steady ahead of this weekend's G7 finance leaders' meeting in Sendai, northern Japan on May 20-21. The dollar was down 0.1 percent at 108.92 yen JPY= , while euro also shed 0.1 percent to 123.25 yen EURJPY= .
The G7 meeting could expose a rift on issues ranging from currency and fiscal policies within the group of advanced economies, dashing Japan's hopes for a coordinated policy response. the dollar, the euro was nearly flat at $1.1317 EUR= .
European Central Bank Governing Council member Jens Weidmann told a German newspaper that recent strong criticism of the central bank's monetary measures may be the result of some measures having blurred the lines between monetary and fiscal policy. British pound added 0.7 percent to $1.4488 GBP=D4 after dropping to a three-week low of $1.4333 in the previous session ahead of Britain's June 23 referendum on European Union membership.
The "remain" camp was ahead of "leave" by eight points in the latest ICM telephone poll released on Monday, though poll results have fluctuated widely. the U.S. data front, New York's Empire State survey was weaker than expected, coming in at its lowest level since February. But few investors used it as an excuse to sell the greenback.
"Dollar bulls weren't excited by Friday's strong retail sales report - which showed the largest rise in consumer spending in more than a year and today dollar bears found no reason to jump into fresh short positions after one soft manufacturing report," Kathy Lien, managing director at BK Asset Management, said in a note to clients.
"Until some piece of data significantly alters the market's expectations for Fed policy, we expect the dollar to remain confined to its recent range against the euro and Japanese yen," she said.
Richmond Fed President Jeffrey Lacker told the Washington Post in an interview published on Monday that the central bank should consider raising rates at its June meeting. But Lacker is not a voting member of the Fed's policy-making board this year, and markets have all but priced out a move next month. funds futures rates show investors see only a 4 percent chance the Fed will raise interest rates at its upcoming June policy meeting and market pricing indicates an increase will not occur until early 2017, according to CME Group's FedWatch tool. But many investors believe the next hike will come later this year. (Editing by Simon Cameron-Moore)