* Bad economic data raise worries of steep global slowdown
* Euro hits 1-wk low, Moody's puts Ireland on negative watch
* Swiss franc falls sharply vs dlr to low of 1.1518 francs
* Data to show U.S. GDP at weakest in 26 years
(Adds quote, updates prices, changes byline)
By Tamawa Kadoya
LONDON, Jan 30 (Reuters) - Growing investor caution fuelled
broad dollar and yen gains on Friday, with poor economic data in
Europe and Japan concentrating minds on deepening global
concerns before U.S. GDP figures later in the day.
The rush to dollar and yen liquidity was reflected in stock
market falls with world share prices, as measured by MSCI's
all-country index, down 1.1 percent on the day <.MIWD00000PUS>.
The euro, already weakened after data showed euro zone
inflation receding and unemployment increasing, fell to a
one-week low against the dollar after ratings firm Moody's
Investors Service downgraded its outlook on Ireland's long-term
debt to negative from stable.
(For details please double click on [])
By 1244 GMT, the euro was down 1.0 percent to $1.2829 after
dropping to $1.2805 <EUR=>, the lowest since Jan. 23. The common
currency also shed 1.2 percent against the yen to 115.13
<EURJPY=R>.
The Swiss franc hit a session low of 1.1518 francs to the
dollar, with traders citing options-related selling from hedge
funds <CHF=>. The franc also slipped against the euro, paring
gains to trade at 1.49 francs per euro <EURCHF=>.
The market will now take its cue from data showing the U.S.
government's first snapshot of the economy in the fourth
quarter, which is expected to show it at its weakest in 26
years. []
U.S. gross domestic product, due at 1330 GMT, is forecast to
show a 5.4 percent decline on an annualised basis, hit by
plunging consumer spending as unemployment grew.
"A negative surprise would likely weaken stocks and could
help the dollar post some gains on back of a risk aversion bid,"
said David Powell, currency strategist at Bank of America.
The dollar was up 0.7 percent versus a basket of six major
currencies at 86.091 <.DXY> Yen strength pulled the dollar down
0.2 percent to 89.73 yen <JPY=>.
EURO PRESSURED
The euro was already under pressure after billionaire
investor George Soros said the currency may not survive without
a European Union plan to deal with toxic assets. []
European Central Bank (ECB) President Jean-Claude Trichet's
comment that the ECB could push interest rates below 2 percent
also kept the currency on the back foot.
Euro zone inflation and employment figures earlier on Friday
underlined the region's vulnerability. Consumer prices rose 1.1
percent year-on-year in January, a level last seen in July 1999,
down from 1.6 percent in December and 2.1 percent in November
[]. Unemployment rose to 8.0 percent in December
[].
"The weak inflation and unemployment data highlight the
negative outlook for the euro zone economy and how far the
European Central Bank is behind the curve," BNP Paribas currency
analyst Ian Stannard said.
The New Zealand dollar struck a six-year low against the
U.S. dollar at $0.5073, according to Reuters data, <NZD=D4>
after Reserve Bank of New Zealand Governor Alan Bollard said
there was room for more interest rate cuts. []
(Additional reporting by Veronica Brown; Editing by David Stamp)
)
