* Stocks, commodities retreat, hitting risk appetite
* Investors lock in profits heading into year-end
* Aussie dollar hits 2-week low against the U.S. currency
(Updates prices, adds comment, changes byline, changes
dateline, previous LONDON)
By Wanfeng Zhou
NEW YORK, Nov 19 (Reuters) - The dollar and yen rose on
Thursday as declines in stock and commodity markets revived the
safe-haven appeal of the U.S. and Japanese currencies.
The euro dropped more than 1 percent against the yen while
the higher-yielding, commodity-linked Australian and New
Zealand dollars tumbled as traders pared back their exposure to
risk.
Analysts said investors were turning cautious heading into
the end of the year, wary that the sharp rally in risky assets
in recent months may have been overdone and that economic data
has not been as rosy as forecast.
"We're running out of gas as far as recovery momentum
goes," said Boris Schlossberg, director of currency research at
GFT Forex in New York. "People have started to take money off
the table as we're getting close to the year-end because they
want to make sure they can lock in all the profits they had on
the long side."
A senior economic advisor to the German government
highlighted uncertainty about the global economy as he told
Reuters Television that Germany could face a double-dip
recession in late 2010 or early 2011 as extra public spending
is withdrawn. []
"There are some indications of a rise in risk aversion -
stocks have come off, and there are slight concerns that a lot
of data recently has not been living up to expectations,"
Standard Bank currency analyst Steve Barrow said.
In early New York trading, The euro fell 0.5 percent to
$1.4884 <EUR=>. It remained within the range of a large, $1.48
to $1.51 "double no touch" options structure expiring on
Friday.
The single euro zone currency also slid to a more than
two-week low of 131.76 yen <EURJPY=R> as losses accelerated
after breaking technical support at the 200-day moving average
of around 132.00.
The dollar fell 0.7 percent <JPY=> to 88.77 yen after
hitting a low of 88.64, the lowest level since Oct. 9,
according to Reuters data.
RISKY ASSETS PULL BACK
U.S. stocks <.SPX> opened lower and oil <CLc1> and gold
<XAU=> prices both retreated.
Investors were also wary of talk from emerging market
countries about capital controls to limit some of the hot money
flows into their economies, with new steps announced by Brazil
and South Korea. [] []
The ICE Futures U.S. dollar index <.DXY>, a measure of the
greenback versus a basket of six currencies, rose 0.3 percent
to 75.384. The index hit a 15-month low of 74.679 early this
week.
Federal Reserve officials on Thursday downplayed the
consequences of the falling U.S. dollar, underscoring that
deflation is still a threat, especially with commercial real
estate prices falling. For details, see [].
The Australian dollar fell to a two-week low and last
traded 1 percent lower at US$0.9202 <AUD=>. The New Zealand
dollar lost 1.9 percent to US$0.7319 <NZD=>.
Analysts said comments from the main opposition party
leader in New Zealand that it would seek to change a policy
that sets the central bank's main role as controlling inflation
through interest rates added to the currency's fall. See
[]
(Additional reporting by Jessica Mortimer; Editing by Padraic
Cassidy)
