* U.S. dollar falls as risk appetite rises
* China repeats call for super-sovereign currency
* US consumer spending, confidence show sign of improvement
(Adds quotes, updates prices)
By Wanfeng Zhou
NEW YORK, June 26 (Reuters) - The U.S. dollar fell against
major currencies on Friday after China renewed its call to
create a super-sovereign reserve currency and as improving
appetite for risk dented the greenback's safe-haven allure.
China's central bank on Friday did not mention the dollar
by name, but said it was a serious defect in the international
monetary system that one currency should dominate. For details,
see []
Chinese officials have repeatedly expressed concern about
the dollar's reserve status in recent months, and analysts have
said the sheer size of Beijing's holdings of U.S. debt means
such remarks are likely to continue to put pressure on the
dollar.
"The Chinese own a tremendous amount of U.S. Treasuries,"
said Fabian Eliasson, vice president of currency sales at
Mizuho Corporate Bank in New York. "They are obviously worried
about inflation and losing value on their investments."
In midday trading in New York, an index that measures the
dollar's performance against six major currencies fell 0.7
percent to 79.867 <.DXY>, just shy of a two-week low of 79.562
seen earlier this week.
The euro rose 0.7 percent to $1.4084 <EUR=>, heading toward
a two-week high of $1.4138 hit this week.
An improvement in investor appetite for risk following a
series of global liquidity measures this week also led to
weakness in the dollar, analysts said.
Against the yen, the dollar slipped 0.8 percent to 95.20
yen <JPY=EBS>.
The U.S. Federal Reserve on Thursday extended some of its
emergency funding facilities and its currency swap lines with
central banks around the world to provide ample U.S. dollar
funds. Earlier this week, the ECB poured 442 billion euros of
one-year funds into money markets.
"A pick-up in risk appetite yesterday weighed on the dollar
and we are still seeing that sentiment impact flows today,"
said John Rivera, currency analyst at DailyFX.com in New York.
Adding to the positive sentiment was U.S. government data
on Friday showing a larger-than-expected jump in personal
income in May. Consumer spending, which accounts for over 70
percent of the country's economic activity, also rose in May.
[]
Another survey showed U.S. consumer confidence rose in June
to the highest since February 2008, as expectations grew that
the worst economic recession since the Great Depression may be
ending. []
Traders remained cautious about more currency intervention
by the Swiss National Bank to weaken its domestic currency
against the euro and the dollar to protect the export-driven
economy.
Data on Friday showed Switzerland's leading growth
indicator, the KOF Swiss Economic Institute's economic
barometer, rose to minus 1.65 points in June -- its first rise
in two years -- beating forecasts of minus 1.76.
[]
"It is really gratifying that the main indicators have
found their trough like in the rest of Europe," said Alessandro
Bee, economist at Sarasin.
"The central bank will continue its course because there is
still a danger of deflation and even though there is a
turnaround it is at such a low level."
The euro was last down 0.4 percent against the Swiss franc
at 1.5257 francs <EURCHF=EBS>. Broad dollar weakness dragged
the U.S. unit down to 1.0845 francs <CHF=EBS>, down 0.9 percent
on the day.
