* Dollar index at 14-month lows; euro shrugs off ZEW
* Canada dlr, Aussie dlr hit 14-month highs
* Gold hits record highs; oil up 1 pct
* Sterling down vs euro on weaker UK inflation data
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By Tamawa Desai
LONDON, Oct 13 (Reuters) - The dollar hit a 14-month low on
Tuesday due to a surge for growth- and commodity-linked
currencies like the Australian and Canadian dollars on the back
of record gold and higher oil prices.
Expectations for robust U.S. earnings results also supported
risk-taking sentiment, which usually depresses the dollar.
"Generally, we are seeing a 'risk on' scenario," said
Geoffrey Kendrick, currency strategist at UBS.
Gold rose above $1,065 an ounce <XAU=> and oil jumped one
percent above $74 a barrel <CLc1>. The dollar and commodities
are often inversely correlated, with gold and oil priced in
dollars.
"Gold is essentially the antithesis of the dollar," said
Neil Mellor, strategist at Bank of New York Mellon in London.
The dollar index, a measure of the greenback's value against
six currencies, was down 0.4 percent at 75.752 <.DXY> after
hitting 75.738 <.DXY>, its lowest since early August last year.
The euro rose to 13-month highs of $1.4872 as dollar-selling
gained momentum, helping push it past option expiries at
$1.4850.
"The euro took a tumble on the back of a much weaker than
expected German ZEW survey, though buyers quickly emerged
lifting the euro back (above) the $1.4800 level," said Jane
Foley, research director at Forex.com in London.
The think tank's October economic sentiment index came in at
56.0, lower than forecasts of 58.3 and down from 57.7 the
previous month. []
Traders also cited talk of central banks diversifying out of
the U.S. dollar and into gold and euros.
FOCUS ON EARNINGS
The euro hovered near a six and a half month high against
sterling of 94.10 pence <EURGBP=> after the release of
unexpectedly soft UK inflation data. []
Expectations of continued earnings improvements were seen
keeping investor focus on so-called riskier assets to the
detriment of the yen and the dollar.
"Risk perception remains an important topic in the absence
of a cyclical trend out of the United States," said Michael
Klawitter, currency strategist at Commerzbank in Frankfurt.
"But I wouldn't expect any serious impact on the risk
perception picture when liquidity remains very ample, so in this
environment commodity currencies should continue to outperform,"
Big corporate names to post earnings this week include Intel
Corp <INTC.O> and Johnson & Johnson <JNJ.N> on Tuesday, JP
Morgan Chase <JPM.N> on Wednesday, and Goldman Sachs <GS.N> and
IBM <IBM.N> on Thursday. [] []
The dollar gained particularly against the yen on
short-covering after Federal Reserve Chairman Ben Bernanke said
last Thursday the U.S. central bank stood ready to tighten
monetary policy once economic recovery took hold.
The U.S. currency was down a third of a percent against the
yen at 89.50 yen <JPY=>, having earlier traded above 90 yen.
Fed Vice Chairman Donald Kohn and New York Fed president
William Dudley are set to speak later in the day.
(Additional reporting by Jamie McGeever; editing by Patrick
Graham)
