* Dollar hits 7-mth low vs yen at 87.69 yen
* Euro gains, helped by ECB 6-day tender results
* Weaker China PMI raises concerns over global growth
(Updates prices, adds comment)
By Dominic Lau and Naomi Tajitsu
LONDON, July 1 (Reuters) - The dollar hit a seven-month low
against the yen and a three-month trough versus Swiss franc on
Thursday as investors remain wary of global economic recovery
after China's manufacturing activity slowed.
The euro, however, gained broadly, recovering early losses
after European banks borrowed less money than expected from a
European Central Bank's tender, cooling concerns over euro zone
banks' funding issues.
The single currency was also supported by Madrid's ability
to sell five-year bonds following Moody's Investors Service on
Wednesday put Spain's sovereign rating on review for possible
downgrade.[]
Chinese manufacturing PMI data slowed in June, heightening
concerns over the global economic recovery and weighing on
high-yielding currencies.
"The underlying market is still that rather negative
sentiment. The currencies that are in particular picking up as
safe-havens are Swiss franc and the yen," Simon Derrick, head of
currency research at Bank of New York Mellon in London.
By 1200 GMT, the U.S. currency fell about 0.8 percent to
87.62 yen on trading platform EBS, its weakest in seven months,
as traders took a stab at stop-loss orders suspected around the
dollar's weakest of the year. The dollar dropped 0.6 percent
against a basket of major currencies <.DXY>.
The euro <EUR=> advanced 0.8 percent to $1.2332, according
to Reuters data, extending gains for a second straight day and
rebounding from a two-week low around $1.2150 hit earlier in the
week.
The euro steadied at 1.3181 Swiss francs <EURCHF=>, though
the single currency had pulled away from 1.3073 hit earlier in
the day, its weakest since its 1999 launch.
Against the yen, it was flat at 108.15 yen, recovering from
an 8 1/2-year low of 107.30 yen hit this week.
The euro earlier hit a lifetime low versus the Swiss franc
after Moody's warning, raising worries about the health of some
euro zone countries as the global economy slows.
However, the results of the six-day ECB tender, which was
largely in line with expectations, helped the euro to hold
gains, as speculation that banks may not be as desperate for
funds as previously had thought.
Thursday's tender followed an offer of three-month funding
the previous day, which received less bids than expected,
indicating that euro zone banks were fairly well positioned to
repay ECB's 442 billion euros emergency loans on Thursday.
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For a graphic on euro zone liquidity
http://graphics.thomsonreuters.com/10/EZ_ECBLQ0710.jpg
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The Australian dollar <AUD=>, which is seen as a proxy for
Beijing's economic strength as China sucks up many of its raw
materials, traded at $0.8360 after hitting a session low of
$0.8315.
The Swedish crown hit the day's low against the euro
<EURSEK=D4> of 9.6030 per euro after Sweden's central bank
raised interest rates by 25 basis points to 0.5 percent as
expected, but said the pace of more monetary tightening would
likely slow.
(Graphics by Scott Barber; Editing by Toby Chopra)
