* Risky positions cut as economic outlook remains uncertain
* Euro slides after stops hit, fund sales, rumour on Merkel
* Aussie, C$ give up earlier gains and fall
By Satomi Noguchi
TOKYO, Jan 15 (Reuters) - The dollar and yen rose on Friday
and the euro fell, along with higher yielders such as the Aussie,
as investors were cautious of building riskier positions while
the global economic outlook remains uncertain.
The euro hit its lowest point in three weeks against the yen
and four months against the pound, with traders citing model fund
selling, stop-loss triggers, fiscal concerns and a rumour, later
denied, that German Chancellor Angela Merkel might resign.
Earlier, currencies leveraged to global growth, such as the
Australian and Canadian dollars, were firmer after upbeat
earnings from technology bellwether Intel Corp <INTC.O>
encouraged some investors to add positions in risky assets.
But others sold those currencies after weaker-than-expected
U.S. retail data for December and higher jobless claims which
failed to reinforce optimism about economic growth and cemented a
view that U.S. interest rates are likely to stay low for some
time.
"The overall tone is still risk-on, but there is still a lack
of clarity about the path ahead and the currencies are reacting
to that lack of clarity," said Mitul Kotecha, global head of FX
strategy at Calyon in Hong Kong.
"Do you continue to buy Aussie, kiwi and sell the yen on risk
appetite? The market's not fully convinced about this."
The Australian and New Zealand dollars fell about 0.6 percent
against the low-yielding yen after gaining the previous day,
while the euro shed about half a percent to 131.40 yen <EURJPY=R>
and 88.31 pence <EURGBP=D4>.
The euro also hit stops below $1.4450 <EUR=>, and at one
point fell as far as $1.4406 on trading platform EBS.
It trimmed some losses after a German government spokesman
said rumours that Merkel might resign were completely without
foundation, but it was still down 0.5 percent to $1.4430.
[]
Analysts said concerns about Greece's fiscal position were
probably the real issue. A trader at a Japanese bank said model
funds had also dumped long euro positions against the yen early
on, which helped push it and the yen crosses lower.
The euro had been been under pressure after European Central
Bank President Jean-Claude Trichet reiterated the importance of a
strong dollar and highlighted the fiscal challenges to a number
of eurozone countries.
He also mentioned Greece and said the country had much work
ahead.
Investor confidence in Greece has fallen as its deficit has
ballooned and credit ratings have been cut, weighing on the euro
in the past couple of months. []
The U.S. dollar index <.DXY> <=USD> rose 0.4 percent to
77.049, although the euro's fall against the yen dragged the U.S.
currency down 0.1 percent on the day to 91.10 yen <JPY=>.
"The market is just stuck in a range after the weak data
further complicated market views about higher rates in the U.S.,"
said a senior sales trader for a Japanese bank.
The Australian dollar fell 0.5 percent to $0.9273 <AUD=D4>,
after rising to a two-month high of $0.9331 the previous day.
The Canadian dollar also fell after hitting a three-month
high at C$1.0225 <CAD=D4> the previous day. Both Australia and
Canada are big commodity exporters and their currencies tend to
advance when investors grow optimistic about global growth.
(Additional reporting by Charlotte Cooper; Editing by Hugh
Lawson)
