* Euro hits 1-mth low vs greenback on govt debt worries
* Fiscal concerns push down sterling to 8-wk low vs dollar
* Yen benefits as risk aversion persists
By Rika Otsuka
TOKYO, Dec 9 (Reuters) - The euro fell to a one-month low
against the dollar on Wednesday as investors unwound positions in
riskier assets ahead of the year-end, prompted in part by rising
debt woes for Greece and Dubai.
Worries about Britain's fiscal health continued to pressure
sterling, which slid to an eight-week low against the dollar.
Fitch Ratings downgraded Greece on Tuesday, while Moody's cut
the ratings of six Dubai-linked issuers after concluding that no
"meaningful" government support would be provided to top firms
like DP World. [] [].
The timing of Greece's downgrade, coming soon after the Dubai
shock, led to a sell-off in the euro, stocks, commodities and
higher-yielding currencies.
"Risk aversion is dominating the market," said Mitsuru
Sahara, chief manager of currency derivatives trading at Bank of
Tokyo-Mitsubishi UFJ. "Investors are nervous, fearing Greece may
not be the last to have its sovereign debt ratings lowered."
Both the yen and the dollar tend to gain when worries about a
global recovery or concerns about debt defaults rattle markets.
The euro fell as low as $1.4665 <EUR=>, its lowest since
early November but later gained to $1.4725, up 0.2 percent from
late U.S. trade. It had shed 0.8 percent on Tuesday. Traders say
immediate support is seen at $1.4625.
The dollar index hit a fresh one-month high of 76.331 <.DXY>
<=USD> in early Asian trade before slipping back to 76.162, down
0.2 percent.
Sterling hit an eight-week trough against the dollar at
$1.6224, before crawling back to $1.6253 <GBP=D4>, down 0.2
percent on the day, according to Reuters data.
Soft UK data, a hefty fall in the value of Royal Bank of
Scotland's shares and worries about the state of Britain's
public finances and AAA rating have weighed on sterling.
The Bank of England will start a two-day policy meeting later
in the day, with a decision on monetary policy to be announced on
Thursday.
The BoE's Monetary Policy Committee has likely nearly
finished with its quantitative easing programme but is not
expected to raise interest rates in coming months. []
The yen kept most of its broad gains made the previous day
when investor risk aversion lifted the Japanese currency.
The dollar was little changed from late U.S. trade at 88.45
yen <JPY=>, well off a one-month peak of 90.78 yen reached late
last week.
Charts indicate the yen could advance to as far as 87.80 yen
per dollar, while support is expected around the 88.80 yen mark.
The euro inched up 0.3 percent to 130.26 yen <EURJPY=R>,
after it shed more than 2 percent on Tuesday.
Sterling slipped 0.2 percent against the yen to 143.70
<GBPJPY=R>, having dropped more than 2 percent on Tuesday.
"Moves to cut back on risk are making the yen investors'
favourite currency at the moment, even though there are few
factors that would inspire investors to pick up the yen
aggressively," said Shuichi Kanehira, senior vice president of
the forex division at Mizuho Corporate Bank.
The yen is seen extending gains against major currencies,
likely testing a 14-year peak versus the dollar early next year,
or even before this year ends if new factors that further stoke
credit jitters emerge, traders said.
The dollar struck a 14-year low of 84.82 yen on trading
platform EBS late November when fears of a possible Dubai debt
default prompted investors to cut carry trades and risk exposure.
Japan's economy grew 0.3 percent in the third quarter,
sharply less than a preliminary estimate, with the country's
recovery from its worst postwar recession still shackled by slow
capital spending, data showed on Wednesday. []
(Additional reporting by Anirban Nag in Sydney; Editing by
Joseph Radford)
