* Euro falls on weak German sentiment data, Greece fears
* Sterling at 4-month peak vs euro on Kraft/Cadbury deal
* Dollar mostly higher, yen mixed after JAL bankruptcy
* Bank of Canada holds rates steady, cuts growth outlook
(Updates prices, adds comments)
By Steven C. Johnson
NEW YORK, Jan 19 (Reuters) - The euro fell broadly on
Tuesday as German investor sentiment soured while persistent
worries about Greece's finances kept the heat on the currency.
Meanwhile, another Chinese move to tighten monetary policy
hurt investor risk appetite, which boosted the U.S. dollar
against both the yen and higher-yield currencies.
The euro fell below $1.43 to a four-week trough beneath its
200-day moving average and also hit a four-month low against
sterling after Kraft Foods <KFT.N> agreed to buy British
chocolate-maker Cadbury Plc <CBRY.L>, increasing demand for
pounds. For more see [].
A bigger-than-expected decline in German investor sentiment
pushed the euro near its lowest level against the dollar this
year, adding to woes inflicted by flagging market confidence in
Greek public finances. [] and []
"Sentiment has definitely soured based on what's happening
in Greece, and the fall in German confidence didn't help. All
we've seen is euro sellers across the board," said Dean
Popplewell, chief strategist at OANDA, an FX brokerage in
Toronto.
The euro was last trading at $1.4258 <EUR=>, down 0.9
percent. Traders say a close below the 200-day moving average
of about $1.4290 could open up fresh euro selling when Asian
markets open on Wednesday.
"That would be an extremely strong signal that the market
will want to test levels much lower," Popplewell said. "We
could hit the $1.30s much sooner than people think."
The euro changed hands at 130.08 yen <EURJPY=>, down 0.4
percent, while against the pound, it fell to a four-month low
of 87.14 pence <EURGBP=D4>, down 1.1 percent on the day.
News of a rise in UK inflation also boosted sterling, which
rose 0.2 percent to $1.6364 <GBP=D4>.
"The story is still one of a soft euro, but sterling is
really taking the limelight at the moment," said Niels
Christensen, FX strategist at Nordea in Copenhagen.
The dollar got a boost after Treasury data showed net
capital inflows to U.S. assets rebounded in November. It was
last up 0.6 percent at 91.21 yen <JPY=>, well off an earlier
four-week low of 90.32 following news that Japan Airlines
<9205.T> would file for bankruptcy protection from some $25
billion in debt.
Traders initially said the yen gained on the news on the
chance the company would start repatriating overseas assets.
[]]
The greenback also rose 0.7 percent against its Canadian
counterpart to C$1.0325 <CAD=> after the Bank of Canada held
rates steady and slightly lowered its growth outlook, saying a
strong currency remains a risk to recovery. []
The Australian dollar fell 0.3 percent to $0.9224 <AUD=D4>
as China's central bank stepped up efforts to tighten liquidity
by lifting auction yields on one-year bills for the second week
in a row. [] Any slowdown in Chinese growth is
seen hurting Australian assets.
(Additional reporting by Jessica Mortimer in London; Editing
by James Dalgleish)
