* Dollar falls broadly, U.S. manufacturing data declines
* G20 meeting seen long on rhetoric, short on specifics
* Risk aversion intact; stock markets on defensive
* Japan slips into recession in Q3
(Adds details, comment, U.S. data, changes byline, changes
dateline)
By Steven C. Johnson
NEW YORK, Nov 17 (Reuters) - The dollar fell against most
major currencies on Monday as data showed U.S. manufacturing
activity slumped and world leaders ended a weekend meeting with
few concrete proposals for dealing with global recession.
The euro also struggled against the yen as fears about the
world economy dulled investors' taste for risk. The 15-country
eurozone is already in recession and Japan said on Monday its
economy joined it as of the third quarter.
The yen rose, however, as investors who borrowed it cheaply
to finance trades in higher-yielding currencies continued to
exit those trades to reduce exposure to risk.
Investor unease was heightened as a New York Federal
Reserve gauge of manufacturing activity fell to a record low
[] and CNBC reported that Citigroup <C.N> intends
to cut up to 50,000 people from its payroll [].
European shares fell while Wall Street was poised to open
lower.
Leaders of the Group of 20 leading economies drafted steps
to rescue the global economy from its worst crisis in 80 years
but left it to individual governments to tailor their responses
to their own circumstances and troubled industries.
"The market had built up hopes that something concrete
would be implemented at the meeting but it was disappointed,"
said Michael Woolfolk, senior currency strategist at The Bank
of New York-Mellon in New York.
Early morning, the dollar was down 0.7 percent at 96.28 yen
<JPY=> while the euro fell 1 percent to 121.70 yen <EURJPY=>.
Against the dollar, the euro was up 0.1 percent at $1.2640
<EUR=>. Sterling was a standout, rising 1.4 percent to $1.4960
<GBP=>, though dealers said that was driven by investors taking
profits after the pound's fall last week to 6-1/2 year lows.
Traders and analysts were sceptical however on the pound
against a backdrop of worsening British economic conditions.
The Confederation of British Industry said Monday the UK
economy in 2009 will suffer its sharpest contraction in almost
two decades and unemployment could approach 3 million by 2010.
In addition to the U.S. manufacturing data, a report last
week showed retail sales plunged by nearly 3 percent in
October, raising concern about the all-important U.S. consumer,
who accounts for some two-thirds of the economy.
That has kept currency traders on edge.
"There's not a lot of incentive right now to put on risk.
We may see bounces, but the overall environment in terms of
risk-taking is not fully stabilized," said Michael Rosborough,
senior global currency strategist at Citigroup in London.
Risk-aversion should continue to boost the yen but should
also support the dollar, analysts said, despite its slide on
Monday.
The dollar has gained as investors have unwound trades in
higher-yielding assets in favor of safer assets such as U.S.
Treasury debt.
"Even in this very unstable market, the dollar has remained
well-bid," said Woolfolk.
(Additional reporting by Veronica Brown in London; Editing by
Tom Hals)
