* Dollar hovers close to 15-mth low; weak dlr trend persists
* Pound falls after Fitch warns on UK rating
* Dip in shares leaves euro struggling to hold above $1.50
(Updates prices)
By Jessica Mortimer
LONDON, Nov 10 (Reuters) - The dollar's trade-weighted index
hovered near a 15-month low on Tuesday on the view U.S. interest
rates will stay low, while sterling fell after Fitch said the UK
was the major economy most at risk of losing its AAA rating.
Analysts said investors lacked any catalyst to take the
dollar much lower after its recent sharp falls, but they said
the trend towards dollar weakness remained in place.
A dip in European equities <> and in oil prices <CLc1>
kept investors cautious of increasing their exposure to risk,
with the euro struggling to hold on to any gains above $1.50.
The euro reversed an initial dip after a weaker-than-
expected German ZEW survey showed investors more gloomy than at
any time in the last four months. []
"The ZEW was a pretty weak number, but the fall in the euro
wasn't huge initially and it quickly fizzled out," said James
Hughes, market analyst at CMC Markets.
"It looks like the whole theme of dollar weakness will
dominate for some time to come, as long as (monetary and fiscal)
stimulus remains in place," he added.
By 1242 GMT, an index of the dollar's performance against
six major currencies was up 0.2 percent at 75.176 <.DXY>. On
Monday, it fell about 1 percent to a low of 74.93, its weakest
since August 2008 and the biggest one-day drop since late July.
The euro edged down 0.1 percent to $1.4979 <EUR=>, though
still close to its 2009 high of $1.5064.
"The single currency is struggling to hold on to the $1.50
handle and with the softer tone in the equity and commodity
markets the euro is likely to give up ground in New York
trading," Brown Brothers Harriman analysts said in a note.
Expectations U.S. interest rates will stay near zero well
into next year have encouraged investors to use the dollar to
fund carry trades in higher-yielding assets, particularly when
equity markets rally.
The Australian dollar <AUD=D4>, a relatively high yielder,
was down 0.2 percent at $0.9276. It had earlier hit $0.9324
after strong Australian business confidence data []
though it stopped just shy of a 15-month high of $0.9330.
STERLING SLIPS
Sterling fell after Fitch Ratings said that of the four
major economies with top-notch AAA status, the UK was the most
at risk, sending the pound down sharply to shed as much as a
cent and a half on the day against the dollar. []
David Riley, co-head of global sovereign ratings at Fitch,
said if there was another significant fiscal stimulus package in
highly-indebted Britain its rating would be at risk.
"The Fitch news was a reminder of the longer-term issues
facing the UK," said Lutz Karpowitz, currency strategist at
Commerzbank in Frankfurt.
The pound slipped as far as $1.6600 <GBP=D4>, well below a
three-month high of $1.6844 reached on Monday, and fell to
beyond 90.00 pence per euro <EURGBP=D4>.
By 1225 GMT, it had pared some of those losses but was still
down 0.6 percent against the dollar at $1.6655, while the euro
was up 0.5 percent at 89.88 pence.
A host of officials from the Federal Reserve are scheduled
to speak on Tuesday and the market will watch what they say
regarding the outlook for interest rates and the eventual
withdrawal of easy monetary policy measures. []
Elsewhere, the yen pared earlier losses against the euro,
which fell 0.1 percent to 134.84 <EURJPY=R> as shares edged
lower. The dollar edged up 0.1 percent to 90.06 yen <JPY=>.
(Reporting by Jessica Mortimer, editing by Nigel Stephenson)
