* Investors in risk-seeking mode as global stocks rise
* Diversification talks into gold keeps dlr on back foot
* Euro breaks above reported options-barrier at $1.4450
(Recasts, adds comments, details. Changes byline and
dateline, previous LONDON)
By Vivianne Rodrigues
NEW YORK, Sept 8 (Reuters) - An advance in global stocks
and commodities boosted investors' risk appetite on Tuesday,
driving the U.S. dollar to its lowest in almost a year as
trading volume picked up after the end of summer holidays in
the United States.
A rally in gold prices above $1,000 and renewed concerns
over the dollar's long-term status as the world's reserve
currency, sparked by a United Nations report on Monday, also
undermined demand for the greenback. []
The dollar slumped to its lowest in almost a year against a
basket of major currencies while the euro broke above a key
options barrier at $1.4450 <EUR=>, traders noted. The U.S.
currency, seen as a safe-haven in times of uncertainty, tends
to fall when risk appetite increases.
"As we enter the first trading day after the summer,
investors are decisively in risk seeking mode," said Camilla
Sutton, a currency strategist at Scotia Capital in Toronto.
Equities are strong, commodities have jumped higher and the
dollar is noticeably weak."
The dollar index, which measures the value of the
greenback against a basket of six major currencies, fell over
one percent on the day to 77.14 <.DXY>, its lowest in almost a
year.
The euro rose as high as $1.4507, according to Reuters
data, up more than 1 percent on the day against the dollar and
at its strongest since December. It was last up 1 percent at
$1.4483.
Gold jumped more than 1 percent to $1,007.45 an ounce
<XAU=>, its highest since March 2008.
Some in the market cited persistent talk this week that
China could be diversifying a small part of its huge $2
trillion reserve stockpile into gold. Others noted that surging
gold prices might encourage another wave of speculative dollar
selling.
Currency analysts at Bank of Tokyo Mitsubishi said in a
note that the daily correlation coefficient between gold and
euro/dollar was 0.77 over the last six months and 0.70 over the
last three months.
"Gold led the move higher in commodities and as it broke the
key $1,000 level it helped push the dollar even lower," said
Sutton at Scotia Capital. "We continue to believe that the
dollar's downward trend will continue into year-end. Today's
move may likely be the beginning of the next leg lower."
Sutton added the euro may trade at $1.50 by year end.
STOCKS ADVANCE
European shares rose for a third straight session, with the
pan-European FTSEurofirst 300 index <> edging close to
recent 11-month peaks on the back of gold's rise and crude
trading over $69 a barrel.
Stock futures in the U.S. also pointed to a higher opening
on Wall Street.
Rising share and gold prices helped lift the Australian and
New Zealand dollars to their strongest levels in a year against
the U.S. dollar.
The Aussie <AUD=> rose as high as $0.8647, its highest
since August 2008. Data also showed Australia's business
confidence hit a six-year high in August, adding to mounting
speculation that local rates will rise in coming months,
providing overall support to the Aussie.
The kiwi <NZD=> rose to a new one-year high of $0.6983,
extending the previous session's gains.
(Additional reporting by Emelia Sithole-Matarise in London;
Editing by Chizu Nomiyama)
