FOREX-Dollar gains vs most majors; euro zone data weak

                                
 * Euro flops vs dollar <EUR=>, yen <EURJPY=>
                                
 * German ZEW sentiment beats forecast; conditions weak
                                
 * Risk demand still low, Japan growth contracts
                                
 * For up-to-the-minute market news, click on <FXNEWS>
                                
 (Recasts, updates prices, adds quotes, changes byline,
changes dateline, previous LONDON)
                                
 By Nick Olivari
                                
 NEW YORK, Dec 9 (Reuters) - The dollar gained against most
currencies, including the euro, on Tuesday though with no major
U.S. data scheduled for release, investors took their cue from
investor sentiment in the euro zone's largest economy.
                                
 The Mannheim-based ZEW economic think tank's poll of
economic sentiment unexpectedly rose to -45.2 in December from
-53.5 in November, but the current conditions component
worsened. [nSAB020603].
                                
 Uniformly grim UK economic data also put the British pound
under pressure, as economists pointed to further cuts in Bank
of England interest rates. [nL9702067].
                                
 "The ZEW is not going to do the euro any favors," said Ron
Simpson, director of FX research at Action Economics in Tampa,
Florida. "And incoming UK data is poor at best, putting the
pound under pressure."
                                
 The euro <EUR=> fell 0.9 percent to $1.2821 in early New
York trade, down from a session peak of $1.2968, according to
Reuters data, its strongest level since November 25.
                                
 Sterling fell 1.4 percent on the day to $1.4695, while the
euro hovered near record highs reached the previous day against
the UK unit <EURGBP=>.
                                
 Demand for risk was generally low after figures earlier on
Tuesday showed the Japanese economy contracted 0.5 percent in
July-September, far more than an initial reading of a 0.1
percent decrease [ID:nT356356].
                                
 The dollar was 0.3 percent weaker against the yen at 92.54
yen <JPY=>.
                                
 Yen strength pushed the euro down 1.2 percent to 118.70 yen
<EURJPY=>. The higher-yielding Australian <AUDJPY=R> and New
Zealand <NZDJPY=R> dollars were down more than 2 percent
against the low-yielding Japanese currency.
                                
 Sterling <GBPJPY=R> also dropped 1.7 percent against the
yen as investors continued to unwind carry trades, where the
yen was used to fund investments in higher-yielding
currencies.
                                
 Investors were also wary of taking on risk as they awaited
a U.S. emergency loan package for its top three automakers,
while figures late last week showed that the U.S. lost more
than half a million jobs in November alone [ID:nN08534770].
                                
 "The harsh reality of global weakness is still coming
through in markets," said Stephen Koukoulas, strategist at TD
Securities in London.
                                
 Rapidly deteriorating economies have prompted central banks
to slash rates aggressively.
                                
 The dollar was up 0.9 percent against the Canadian dollar
at $1.2661 after the Bank of Canada unexpectedly cut its key
interest rate by 75 basis points to a 50-year low of 1.5
percent on Tuesday and declared the Canadian economy to be in
recession. [ID:nBAC000266].
 (Additional reporting by Veronica Brown in London)
 (Reporting by Nick Olivari, Editing by Chizu Nomiyama)