* Dollar, yen underpinned by global growth worries
* Global equities lower, capping risk demand
* German ZEW index improves to -53.5, beating expectations
* Sterling hits record low vs euro
(Adds comments, updates prices, changes byline, changes
dateline, previous LONDON)
By Wanfeng Zhou
NEW YORK, Nov 11 (Reuters) - The U.S. dollar edged higher
against a basket of currencies on Tuesday, as concerns over a
deteriorating global economy and a weaker tone in equities
prompted investors to shun riskier assets.
The yen also rose against most currencies as worries over
slowing growth kept up the pressure to reverse carry trade
positions, where low-yielding currencies like the Japanese
currency are used to buy assets in higher-yielding ones.
In the latest sign of the fallout from the economic
upheaval, Chinese import and export growth both slowed in
October while inflation fell to a 17-month low as domestic
demand cooled, government data showed on Tuesday. See
[].
"The market is a little mixed this morning, but I think the
overall theme is for the Japanese yen to get a little stronger
and the U.S. dollar as well," said Vassili Serebriakov,
currency strategist at Wells Fargo.
"We've seen a mixed range of data overnight, but I think
the Chinese data has certainly played into the fears of the
global economic downturn and that's probably weighing on the
commodities and helping the Japanese yen and the dollar," he
added.
Analysts said the numbers from China boosted speculation
that Beijing will cut interest rates soon to back up the
government's massive economic stimulus plan worth nearly $600
billion announced over the weekend.
In early New York trading, the ICE Futures U.S. dollar
index, which tracks the value of the greenback against a basket
of six currencies, was up 0.2 percent at 86.110 <.DXY>.
Trading volume was light due to the Veteran's Day holiday,
with the currency market continuing to watch movements in the
equity market for direction, analysts said.
The euro <EUR=> was largely flat at $1.2725 after hitting a
low of $1.2677 in Asian trade. Against the yen, the dollar was
also little changed at 97.94 yen <JPY=>.
EURO FLAT DESPITE STRONGER DATA
The euro was little changed against the dollar despite a
better-than-expected reading in a key German indicator survey
<ECON> as the single currency was weighed down by weakness in
European share prices.
The euro briefly rose after the ZEW Institute's index of
German economic sentiment came in at -53.5 in November,
improving from -63.0 in October. It also beat market
expectations for a reading of -62.0 See [].
"The downturn in the euro/dollar suggests that investors
remain bearish against the currency pair as they expect the
European Central Bank to ease policy further," said David Song,
currency analyst at DailyFX.com.
Elsewhere, sterling was battered as it fell to its lowest
in 12 years on a trade-weighted basis and hit a record low
against the euro on concerns that the UK economy will suffer
even more than the euro zone economy.
Benchmark UK interest rates at 3.0 percent are also now
lower than key euro zone rates at 3.25 percent, and some
speculate the Bank of England will continue to make more
aggressive rate cuts compared with the European Central Bank
[] [].
The euro hit a record high against sterling of 82.14 pence,
according to Reuters data <EURGBP=> while the pound fell 0.3
percent against the dollar at $1.5563 <GBP=>.
Also on Tuesday, Russia's central bank let the rouble
weaken against a euro/dollar basket beyond the 30.41 level it
has defended in recent months, spurring speculation of further
gradual depreciation. []
(Additional reporting by Tamawa Kadoya; Editing by Theodore
d'Afflisio)
