* Dollar falls across board as data fuels recovery concern
* U.S. consumer sentiment falls, trade gap widens
* Higher-yielding Australian, New Zealand dollars rally
(Updates prices, adds comment, changes byline)
By Steven C. Johnson
NEW YORK, Nov 13 (Reuters) - The dollar fell broadly on
Friday after data showing a wider U.S. trade deficit and weaker
consumer sentiment reinforced views that the United States may
return to economic health more slowly than other countries.
A brighter outlook abroad, including a report showing the
euro zone may have exited recession in the third quarter,
boosted the euro and also encouraged investors to buy stocks
and commodity-linked currencies such as the Australian dollar.
News that the U.S. trade gap was at its widest in September
in more than a decade while a grim employment outlook put
consumers in their gloomiest mood in three months by early
November supported expectations that U.S. interest rates will
stay at record lows near zero for the foreseeable future.
"There is increasing evidence that the U.S. recovery is
much more vulnerable than previously thought, which provides
another reason for traders to bail out of U.S. dollars," said
Kathy Lien, director of FX research at GFT Forex in New York.
The euro was up 0.6 percent at $1.4925 <EUR=>, about a cent
above its session low. It neared its 2009 high around $1.5060
earlier this week. The dollar fell 1 percent to 89.55 yen
<JPY=> and the euro shed 0.3 percent to 133.66 yen <EURJPY=>.
Traders said yen gains were partly driven by Finance
Minister Hirohisa Fujii's saying he was less worried about
Japanese government bonds and budget requests for the next
fiscal year. For more, see [].
For more on the U.S. and European data see []
and [].
Wall Street stocks rose and investors also bought
relatively high-yield currencies such as the Australian dollar
<AUD=>, up 1.1 percent to $0.9332, and the New Zealand dollar
<NZD=>, 1.5 percent stronger at $0.7435.
Sterling was up 0.7 percent at $1.6689 <GBP=>, while the
dollar fell about 1 percent each against the Mexican peso
<MXN=> and the Brazilian real <BRL=>.
With the U.S. jobless rate above 10 percent and the Federal
Reserve signaling it's in no rush to lift interest rates,
analysts say investors are increasingly borrowing dollars at
low rates to finance trades in assets with higher returns.
News that the U.S. trade gap unexpectedly widened by 18.2
percent as imports from China increased and oil prices rose for
a seventh straight month in September advanced that view.
The fact that the U.S. trade deficit widened "in an
environment when the dollar has been very weak" was concerning,
said Jacob Oubina, currency strategist at Forex.com in
Bedminster, New Jersey. "If we can't get the trade deficit
lower in such circumstances, it's really not good for growth."
A weak currency usually decreases imports and boosts
exports, improving a country's balance of trade position.
Daniel Katzive, currency strategist at Credit Suisse in New
York, said the data also suggests that a recovery in the United
States is going to "go hand in hand with a larger financing
requirement" for the country.
"The United States is going to remain a major importer of
capital and that's problematic for the currency when you have
very low yields," he added.
Currency markets will also be following U.S. President
Barack Obama's first official tour of Asia as speculation grew
that this could generate pressure on some countries -- China in
particular -- to let their currencies rise. []
(Additional reporting by Wanfeng Zhou; Editing by James
Dalgleish)
