FOREX-Yen rises, regains ground after dip on China data

[kravchenkoalex40]

Yen briefly dips on crosses after batch of Chinese data

* Industrial output and retail sales a bit above expectations

* But new Chinese local-currency loans fall in Oct

* Dollar index pares losses after hitting 15-mth low

By Masayuki Kitano

TOKYO, Nov 11 (Reuters) - The yen rose against the dollar on Wednesday buoyed by stop-loss buying and also eked out gains against the high-yielding Australian dollar after a mixed batch of Chinese economic data.

The yen fell initially after the figures showed Chinese industrial output and retail sales rose a bit more than expected in October from year earlier, with industrial output growth jumping to a 19-month high in the year to October. [ID:nPEK330193]

The dollar also dipped broadly after the data and hit a fresh 15-month low of 74.889 .DXY against a basket of currencies.

But dips by the yen and dollar against currencies such as the higher-yielding Australian dollar quickly lost steam, and the currency market reaction was limited overall.

"The numbers are a bit mixed," said Masafumi Yamamoto, chief FX strategist for Japan at Barclays Capital, adding that while China's industrial output and retail sales figures were slightly better than expected, local currency loans fell in October. [ID:nBJB003561]

Loans are a focal point, since they have been seen as a driver of China's domestic demand-led economic recovery, and a factor behind fund flows into China's stock market, Yamamoto said.

The dollar index dipped 0.1 percent to 74.981 after earlier hitting its lowest since August 2008.

The dollar slipped 0.2 percent against the yen from late U.S. trading on Tuesday to 89.60 yen JPY=.

Earlier, the dollar fell to as low as 89.46 yen on trading platform EBS, with traders saying the dollar extended its losses against the yen after triggering some stop-loss dollar selling and yen buying.

The Australian dollar rose as high as $0.9325 AUD=D4, nearing its October peak of $0.9330, which was the highest since August 2008.

Market players said the U.S. dollar was out of favour as investors expect interest rates to remain near zero into 2010 as the economy recovers from a harsh recession.

Several Federal Reserve officials seemed to back that view on Tuesday, striking a cautious note on the U.S. economic outlook. [ID:nN10315173].

"The dollar index is entering a new world, and the question is whether there will be more dollar selling from here," said Akira Hoshino, chief manager for Bank of Tokyo-Mitsubishi UFJ's foreign exchange trading department.

"Since U.S. monetary policy is the fundamental basis for dollar-selling, until people get the sense that they are really going to do it (raise interest rates), it will be hard to buy the dollar," Hoshino said.

The euro held steady against the dollar at $1.4989 EUR=.

Option barriers are lurking around $1.5025 levels while buyers are lined up at $1.4950.

Meanwhile, sterling GBP=D4 dipped 0.1 percent to $1.6722, having tumbled to as low as $1.6600 on Tuesday after Fitch ratings agency told Reuters that Britain was the economy most at risk of losing its top AAA credit rating.

U.S. Treasury Secretary Timothy Geithner said on Tuesday it was important to U.S. economic health to maintain a strong dollar, but the initial market reaction was muted. [ID:nTKU105666] (Additional reporting by Anirban Nag in Sydney; Editing by Michael Watson)

[kravchenkoalex40]

* Dollar index rises but is still near 15-month low

* Weak dollar trend to persist, analysts say

* Pound falls after Fitch warns on UK rating

* Euro struggles to hold above $1.50 (Updates prices, adds detail)

By Steven C. Johnson

NEW YORK, Nov 10 (Reuters) - The dollar bounced off a 15-month low on Tuesday and the euro dipped below $1.50 as investors paused to assess whether the global outlook justifies a recent rally in higher-yielding currencies and assets.

U.S. stock indexes were mixed as investors moved to the sidelines, providing respite for the dollar, which investors borrow at low rates to fund purchases of higher-yield assets.

Sterling tumbled after Fitch ratings agency told Reuters that Britain was the economy most at risk of losing its top AAA credit rating, though the pound later recouped most losses.

Analysts said the dollar was still out of favor, though, as investors expect benchmark U.S. interest rates to remain near zero into 2010 as the economy recovers from a harsh recession.

"With many currencies reaching new highs recently, there is a reasonable amount of resistance toward a headlong lunge into fresh territory for now," said Andrew Wilkinson, senior analyst at Interactive Brokers Group in Greenwich, Connecticut.

John Doyle, foreign exchange strategist at Washington-based Tempus Consulting, added, "yesterday, we might have moved a little too far too quickly."

The euro dipped 0.1 percent to $1.4978 EUR=, off its 2009 high above $1.5060. It hit $1.5020 earlier. The dollar was down 0.2 percent at 89.85 yen JPY= while the euro fell 0.3 percent to 134.56 yen EURJPY=.

An index of the dollar against six major currencies edged up 0.01 percent after hitting a 15-month low on Monday .DXY.

The euro wobbled after a German ZEW economic sentiment index showed that investors were more gloomy than at any time in the last four months. For details see [ID:nLA641918].

Sterling fell after Fitch Ratings said that of the four major economies with top-notch AAA status, the UK was the most at risk. That pushed the currency GBP= to $1.6602, nearly two cents off its session high, though it had ground its way back to $1.6729, down 0.1 percent, by late afternoon in New York.

David Riley, co-head of global sovereign ratings at Fitch, said if there was another significant fiscal stimulus package in highly indebted Britain its rating would be at risk.

"The Fitch news was a reminder of the longer-term issues facing the UK," said Lutz Karpowitz, currency strategist at Commerzbank in Frankfurt.

Still, with U.S. interest rates expected to remain low, analysts said they saw little traction for the dollar, and several Federal Reserve officials on Tuesday struck a cautious note on the U.S. economic outlook. [ID:nN10315173] (Additional reporting by Nick Olivari; Editing by James Dalgleish)

[Pinalli]

The British Pound Sterling fell across the board on Wednesday, after the Bank of England’s Governor, Mervyn King, said a slide of the Pound could help UK exporters and aid Britain's recovery from recession.

The remarks came after the UK released data on inflation which came in below the target, a better than expected showing.

Forex Online Investors are nervous however, even with the good inflation news, that after the elections early next year, the new government will implement a policy of fiscal tightening, which will likely cut the asset-buying program, a program that is widely hailed as a success.