* Dollar index eases after hitting fresh seven-month highs
* Euro trades back above $1.07
* U.S. holiday may weigh on trade
* China industrial output in line with forecasts, Aussie unfazed (Updates Australian dollar prices, adds China data)
By Patrick Graham
LONDON, Nov 11 (Reuters) - The euro traded back above $1.07 on Wednesday, recovering from another charge by the dollar in the previous session in trade thinned out by the U.S. Veterans Day holiday.
The greenback had looked to be steaming higher again on Tuesday after a brief period of consolidation following shockingly strong U.S. jobs numbers last week that for many baked in a rise in Federal Reserve interest rates next month.
But the debate this week among analysts and traders at the major banks has raised a number of potential barriers to a push past levels around $1.0450 per euro that stymied the greenback in March and April.
Analysts pointed to speeches by European Central Bank chief Mario Draghi as the best chance of fresh direction for the market over the next couple of days. Draghi is expected to speak at around 1315 GMT in London.
"The moves today look technical more than anything but there is some dollar weakness," said Ulrich Leuchtmann, head of FX research at Commerzbank (DE:CBKG) in Frankfurt.
"The news (of a Fed hike in December) is priced in basically, so its difficult to see what may be the immediate driver for another rally. What the ECB will do next month is the big unknown."
Draghi's hints last month of the prospect of cuts in the ECB's already negative interest rates and an expansion of its money-printing programme sparked a slide in the euro.
The euro last stood at $1.0741 EUR= , recovering after having slid below $1.0700 for the first time in over six months overnight. The dollar index .DXY fell 0.2 percent to 99.055.
The Australian and New Zealand dollars had been the biggest movers in a subdued Asian session on currency markets, both up almost half a percent against the dollar. Commerz's Leuchtmann put that down to the greater sensitivity both have shown to broader dollar moves over the past year.
The Reserve Bank of New Zealand's latest financial stability report warned of risks from a 27 percent surge in house prices this year in the capital Auckland, read by markets as a sign the bank might have to keep a tighter rein on policy in response.
"The kiwi jumped on these headlines as the market interpreted them as less dovish," said Sue Trinh, a strategist with RBC Capital Markets.
Sterling, which has also recovered some ground after sharp falls last week, should take some more direction from wage data and jobs numbers due at 0930 GMT. If they support the easier outlook on policy given by the Bank of England last week, the pound may face another dip towards $1.50. By 0848 it was 0.2 percent up on the day at $1.5148.