* MSCI world equity index up 0.5 pct at 297.33
* Dollar hits 15-month low; euro, Australian dollar firm
* Government bonds fall; oil firms
By Natsuko Waki
LONDON, Nov 11 (Reuters) - The dollar hit a fresh 15-month
low and world stocks held near a three-week high on Wednesday
after remarks from Federal Reserve officials reinforced the view
that U.S. interest rates will remain near zero for some time.
Strong Chinese data on factory output and retail sales,
along with forecast-beating results from Italy's biggest bank
Unicredit <CRDI.MI> following upbeat reports from other banks,
encouraged investors to buy risky assets.
Top Fed officials said in a string of speeches on Tuesday
that high unemployment and reluctant consumers would likely make
a U.S. economic recovery weak and erratic. []
Data on Friday showed the U.S. jobless hit 10.2 percent in
October, its highest since 1983.
The prospect of near-zero interest rates persisting has
prompted investors to sell dollars for higher-yielding
currencies, such as the Australian dollar, while keeping alive
the momentum for a risk asset rally.
"Market volatility may remain high but I continue to believe
we will see significant new highs across the board before the
year-end," said Stephen Jen, managing director of macroeconomics
and currencies at Bluegold Capital Management.
"The Fed will not be in a hurry to tighten. With incremental
growth both in the U.S. and the rest of the world being
positive, and if the Fed remains easy, I believe risk assets
will continue to rally."
The dollar index, which measures its strength against major
currencies, fell to 74.806 <.DXY>, while the euro rose 0.3
percent to a two-week high of $1.5043 <EUR=>.
The Australian dollar hit a 15-month high of $0.9345
<AUD=D4>. The country's central bank raised its main interest
rate by 25 basis points to 3.5 percent last week, the second
hike in as many months.
UPBEAT BANK RESULTS
MSCI world equity index <.MIWD00000PUS> rose half a percent
towards its highest levels in three weeks. The FTSEurofirst 300
index <> rose 0.7 percent.
Unicredit, the biggest lender in central and eastern Europe,
posted a fall in third-quarter net profit but beat analysts'
forecast with the help of a surge in trading income. ING
<ING.AS> posted a third-quarter in line with preannounced
results.
Emerging stocks <.MSCIEF> rose 0.9 percent.
Other Chinese data showing a dip in the pace of investment
and loan growth and lower-than-expected exports and imports
offered reasons to be cautious.
Analysts say loans are key since they have been seen as a
driver of China's domestic demand-led economic recovery and a
factor behind fund flows into China's stock market.
"There's no shortage of caution creeping into the market as
we eye a test on fresh highs for the year," IG Markets analyst
Ben Potter said.
"As a result, sentiment is likely to play a large part in
determining direction in the near term and traders could find
themselves looking to book profits quickly."
U.S. crude oil <CLc1> rose 0.2 percent to $79.21 a barrel.
The December Bund future <FGBLc1> fell 25 ticks ahead of a
sale of 6 billion euros in new 10-year German bonds.
(Reporting by Natsuko Waki, editing by Mike Peacock)
