* U.S. dollar index at 12-month low, euro hits 2009 high
* China data boosts economic recovery hopes; shares rise
* U.S. dollar/yen at 7-month low
* U.S. consumer sentiment improves
(Recasts, adds comments, updates prices, changes byline)
By Gertrude Chavez-Dreyfuss
NEW YORK, Sept 11 (Reuters) - The yen rose across the board
on Friday as a pullback in Wall Street shares and a drop in oil
prices negated upbeat U.S. consumer sentiment, rekindling
safe-haven demand for the Japanese currency.
The dollar slipped against a basket of currencies, touching
a nearly one-year low earlier, as the sell-off continued, on
track for its worst weekly performance in more than three
months. The greenback also fell to a fresh 2009 low versus the
euro, but it recouped most of its losses.
The prospects for economic recovery and low U.S. borrowing
rates continued to encourage investors to move cash out of the
dollar into riskier assets in other currencies.
"Today we're getting a little bit more action versus the
yen and weaker U.S. stocks are helping," said Patrick Brodie,
chief FX dealer at Sumitomo Mitsui Banking Corp in New York.
The yen typically benefits when there is heightened risk
aversion in the market.
"In the dollar's case, selling has been fairly persistent
all week and today is no exception. The euro and the Australian
dollar should continue to make new highs next week."
In early afternoon trading in New York, the dollar was down
1.4 percent on the day against the yen at 90.48 yen <JPY=>,
having hit a seven-month low of 90.22, according to Reuters
data.
Traders say there are option barriers at the 90 yen area,
limiting the dollar's downside.
The dollar was down 2.7 percent this week versus the yen.
The euro was also 1.4 percent lower versus the Japanese
currency, trading at 131.88 yen <EURJPY=R>.
The InterContinental Exchange's dollar index <.DXY>, a
gauge of the greenback's performance against six other major
currencies, was down 0.2 percent at 76.655 after falling to
76.457, its lowest in nearly a year.
The euro was little changed at $1.4597 <EUR=>, 2 percent
higher on the week. The euro zone single currency hit a 2009
high of $1.4627 earlier, according to Reuters data.
The euro briefly erased gains earlier when a U.S. Coast
Guard training exercise on the Potomac river set off a security
scare as the United States marked the eighth anniversary of the
Sept. 11 attacks. For more see [].
Investors sold the dollar this week as signs emerged of a
global recovery from one of the worst downturns this century.
That encouraged investors to leave the perceived safety of the
greenback and favor riskier assets such as stocks, emerging
markets and commodity-linked currencies.
A report showing improving U.S. consumer sentiment on
Friday further added to recent evidence that an economic
recovery was picking up speed.
The Reuters/University of Michigan Surveys of Consumers
preliminary reading of consumer confidence index for September
came in at 70.2, the highest since June. []
"Dollar selling momentum has picked up and it is likely to
continue for a while," said Win Thin, a currency strategist at
Brown Brothers Harriman in New York.
Solid data out of China added to the view the global
economy is on the road to recovery. [] Questions
about the dollar's long-term value added to the negative
sentiment towards the U.S. currency.
Sterling, meanwhile, rose 0.2 percent to $1.6682, within
sight of a one-month high of $1.6742 <GBP=>, while the New
Zealand dollar gained 0.5 percent to US$0.7066 <AUD=>.
(Additional reporting by Vivianne Rodrigues; Editing by James
Dalgleish)
