* Yen, dollar gain as weak U.S. data stokes risk-aversion
* Euro tumbles on growth fears, Soros comments
* U.S. stimulus, Fed policy seen leading to recovery
(Updates prices, adds comment)
By Steven C. Johnson
NEW YORK, Jan 29 (Reuters) - The dollar and yen rose
broadly on Thursday as bleak U.S. economic data and falling
share prices kept investors wary of risk even as countries
embraced more monetary and fiscal stimulus to boost growth.
The euro shed more than 1 percent to fall below $1.30
<EUR=> and plunged against the yen after billionaire investor
George Soros, cited by Bloomberg, told an Austrian newspaper
that the currency may not survive without a European Union plan
to deal with toxic debt.
A warning from European Central Bank President Jean-Claude
Trichet that the ECB could push interest rates below 2 percent
and use other measures to boost growth hit the euro, as did
data showing the biggest monthly jump in German unemployment in
four years.
"The euro is getting pounded because it is not so clear
that officials will be able to coordinate effective policy in
this crisis," said Boris Schlossberg, chief currency strategist
at GFT Forex in New York. "You see flows into the dollar
because there's a greater sense of confidence that the United
States will persevere."
The euro was down 1.2 percent at $1.2975 <EUR=> after
earlier falling to $1.2934. Against the yen, it was off 1.9
percent at 116.46 <EURJPY=>. The dollar fell 0.7 percent to
89.74 yen <JPY=>.
The yen tends to advance when risk appetite fades because
investors unwind trades financed with cheaply borrowed yen.
The dollar attracted buyers despite another batch of grim
U.S. data that underscored the weakness of the U.S. economy.
Reports showed jobless rolls hitting a record high, orders
for big-ticket items such as appliances falling for a fifth
straight month in December and sales of new homes plunging 14.2
percent to a record low.
But plans for robust U.S. fiscal spending and the Federal
Reserve's move to bring interest rates down near zero last
month have spurred hopes of a second-half U.S. recovery.
The Fed said this week it is ready to buy long-dated
Treasury debt but did not offer details on timing.
"The market must clear before we can have a recovery and
the plans are in place by the Fed to lower rates and provide
liquidity," said Brian Taylor, head currency trader at M&T Bank
in Buffalo, New York. "What the U.S. is doing is far ahead of
other countries right now."
That contrasts with the ECB approach, which has been slower
to reduce rates. Trichet has indicated that the next rate move
would not come until March, though in remarks to CNN on
Thursday, he said rates may still fall below the current 2
percent and said officials could use unconventional means to
boost growth.
"A lot of people thought that the ECB was ruling out
quantitative easing, but Trichet's comments suggest otherwise,"
said Adarsh Sinha, currency strategist at Barclays in London.
Sterling rose 0.7 percent to $1.4310 <GBP=>, boosted by
currency flows that outweighed weak UK data. The euro fell 1.8
percent to 90.75 pence <EURGBP=>.
The New Zealand dollar fell to $0.5127, the lowest since
December 2002, according to Reuters data, after the central
bank cut interest rates by 150 basis points to 3.5 percent and
hinted at more cuts.
(Additional reporting by Nick Olivari and Gertrude
Chavez-Dreyfuss; Editing by Dan Grebler)
