* Euro flat vs USD, off earlier 4-yr low as stocks recover
* Euro pick-up limited, Hungary, euro debt woes in focus
* Dollar, yen supported on risk aversion
(Recasts, adds comment, detail, updates prices)
By Naomi Tajitsu
LONDON, June 7 (Reuters) - The euro stabilised after hitting
a four-year low against the dollar on Monday as a pick-up in
global share prices from early losses prompted some investors to
cover short euro positions.
European corporate demand helped to lift the euro after it
fell to $1.1876, its weakest since March 2006, but gains were
limited as a warning from Hungary last week about its fiscal
woes reminded investors of the scale of debt problems in Europe.
The euro stayed on the back foot after tumbling 1.5 percent
against the dollar on Friday, when weaker-than-expected U.S.
jobs data sparked concerns the global economic recovery may be
losing steam and cut demand for riskier assets.
European shares recovered much of their early losses.
Analysts said equities were finding their footing on the view
that Friday's sell-off may have been overdone.
This was helping to support the euro, said Geoff Kendrick
senior currency strategist at UBS.
"Equities have stabilised, and U.S. futures have turned
positive," he said. "The fears which drove the market lower on
Friday have subsided for now."
At 1152 GMT, the euro <EUR=> was steady at $1.1974, not far
from the day's high of $1.1991 according to Reuters data.
Traders said demand from corporates and real money accounts
was helping to pull the single currency off its lows, although
many investors see the euro grinding lower in coming weeks as
the euro zone debt problems are expected to stifle the region's
economic recovery.
A bigger-than-expected jump in German industrial orders and
reasonable demand at an offer of Belgian government debt were
helping to bolster the euro, market participants said.
[] []
European shares <> traded 0.3 percent lower, clawing
back ground after hitting their lowest in nearly a week in
earlier trade. U.S stock futures rose 0.2 percent, recovering
from an earlier fall.
The dollar index <.DXY> was little changed on the day at
88.321. The euro's earlier slide had pushed the U.S. currency to
a 15-month high at 88.708 against a currency basket.
The euro was unchanged at 109.66 yen <EURJPY=R>, having
earlier hit an 8-1/2-year low of 108.06 yen on the EBS trading
platform. The yen pared gains made in early trade, but was
generally supported as investors continued to favour the
low-yielding currency.
SLOW RECOVERY
Concerns about public finances in Hungary -- a member of the
European Union, though not the euro zone -- added to market
jitters after comments last week by government officials that
Hungary could face a Greek-style crisis. []
The Hungarian government downplayed the comments at the
weekend but analysts said the comments had reignited concerns
about whether peripheral euro zone countries will be able to
deliver tough austerity measures, and worries about European
banks' exposure to Hungary.
"Euro/dollar is heading lower on a combination of the
Hungary situation and the U.S. jobs data, though it's come an
awfully long way in recent days and it won't head lower in a
straight line," said RBS currency strategist Paul Robson.
G20 finance ministers meeting at the weekend did not voice
any strong concern about the euro's sharp slide on Friday, nor
did euro zone policymakers, further encouraging euro selling,
traders said. []
Weaker-than-expected U.S. payrolls data on Friday reinforced
views the U.S. economic recovery may be slow and could
jeopardise the wider global recovery. []
These issues have helped to cut demand for euros. IMM data
on Friday showed net short positions in the single currency
remain high even as some were cut last week. []
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For a graphic on CTFC futures positioning, click
http://graphics.thomsonreuters.com/10/CFTC_CURR.html
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(Graphics by Scott Barber, additional reporting by Jessica
Mortimer; Editing by Susan Fenton)
