* Dollar falls broadly, hits record low vs Swiss franc
* Dollar hits 6-1/2 week low vs yen, 7-week low vs Aussie
* Euro recovers vs dlr, moves exaggerated by thin trade
(Updates prices, adds quote, changes byline, dateline,
previous LONDON)
By Wanfeng Zhou
NEW YORK, Dec 28 (Reuters) - The dollar fell broadly on
Tuesday, hitting an all-time low against the Swiss franc, while
the yen rallied after data showed Japanese factory output rose
for the first time in six months in November.
The euro gained versus the dollar after automatic buy
orders were triggered at key chart points around $1.32. It rose
as high as $1.3275 <EUR=EBS>, extending its recovery from last
week's three-week low of $1.3055.
The Swiss franc was the biggest gainer among major
currencies, with traders citing year-end buying by Swiss
corporates. Moves were exaggerated in very thin post-Christmas
trade, with UK markets closed for a public holiday, they said.
The dollar traded sharply lower against commodity-linked
currencies, with the Australian and New Zealand dollars both
rising almost 1 percent.
"The industrial production numbers out of Japan were
extremely strong, and that certainly has provided a bid to the
yen across the board," said Dean Popplewell, chief strategist
of FX brokerage OANDA in Toronto.
"Dollar weakness is basically on the back of commodities,"
he said. "Both oil and gold are seeing robust demand. The
market seems to have shrugged off the interest-rate hike in
China over the weekend."
The dollar also dropped to a 6-1/2 week low around 81.81
yen <JPY=EBS> on trading platform EBS, and was last down 1.1
percent at 81.90 yen.
Japanese industrial output rose 1.0 percent in November and
manufacturers expected to boost production in coming months,
suggesting that firm demand in Asia will help the economy
resume a recovery early next year. For details, see
[]
The dollar slipped below a key support at its 55-day moving
average around 82.59 yen and at 82.40 yen.
The euro <EUR=> was last up 0.4 percent at $1.3211. Its
next target is $1.3278, a 50 percent retracement of its fall
earlier this month from $1.3500 to $1.3055, and then around
$1.3330-35, which includes a 61.8 percent retracement of the
same decline as well as the pair's peak in August.
"Essentially the euro is rising on short-covering. I think
we'll need to watch the market a bit more to see how investors
plan to allocate their money after Christmas and in the new
year," said Estuko Yamashita, chief economist at Sumitomo
Mitsui Banking Corp in Tokyo.
Many in the market expect to see more euro weakness in the
new year, however, amid persistent worries over debt problems
for Spain and Portugal. But euro bears had been frustrated by
the currency's firm support for more than a week at its 200-day
moving average just below $1.31.
SWISS FRANC GAINS
The dollar fell to a record low against the Swiss franc
<CHF=EBS> at around 0.9435 francs. The euro fell as low as
1.2494 francs <EURCHF=EBS>, near an all-time low of 1.2440 set
last week.
"Swiss franc buying is from local pension funds and
corporates. Amounts are big and could be end-of-year flows," a
London-based trader said.
The Swiss franc has notched broad gains recently as
investors seek a safe-haven alternative to the euro, with
sentiment toward the single currency dented by the euro zone
debt problems.
The latest positioning data showed speculators increased
bets against the euro in the week ending Dec. 21, while they
trimmed bets against the U.S. dollar and boosted long positions
in the Swiss franc. []
Year-end flows were broadly negative for the dollar, which
lost nearly 1 percent against a basket of currencies <.DXY> to
79.596, below its 100-day moving average around 79.808.
Broad rises in commodity prices helped buoy the Australian
dollar <AUD=D4> to a high around $1.0150, its strongest since
Nov. 11 and close to a 28-year high near $1.0182.
(Additional reporting by Jessica Mortimer in London; editing
by Jeffrey Benkoe)
