* Euro edges up to $1.4500 <EUR=>, risk demand lingers
* Dollar vulnerable on debasement fears
* Aussie, kiwi dollars off 1-year highs hit earlier
(Updates prices, adds comment, detail)
By Naomi Tajitsu
LONDON, Sept 9 (Reuters) - The dollar edged lower on
Wednesday, extending sharp falls from the previous day, as
slightly higher European shares bolstered risk demand and kept
the U.S. currency near the year's low against a currency basket.
Renewed questions over the dollar's long-term status as the
world's reserve currency, investors moving out of dollars into
other assets such as gold, and options-related euro buying had
fuelled broad-based dollar selling on Tuesday.
A slide in European shares had bolstered the dollar in early
European trade, but their recovery prompted some traders to buy
currencies seen as being higher risk on dips, prodding the
dollar lower.
"That move suggests that there's still appetite for risk,"
said Jane Foley, research director at Forex.com. "There are
still buyers who want to push euro/dollar above $1.45."
By 1059 GMT, the euro <EUR=> was a touch higher on the day
at the key $1.4500 level, having climbed to the day's high of
$1.4518 in early trade.
The euro held near the year's high of $1.4535 hit on
Tuesday.
Against the yen, the euro <EURJPY=R> traded 0.2 percent
higher at 134.04 yen, having risen as high as 134.18 yen in
earlier trade, its highest in nearly two weeks.
"Risk-loving currencies continue to enjoy widespread support
even as doubts linger over the health of the global economy,"
said Daragh Maher, deputy head of FX strategy at Calyon.
The dollar <JPY=> was slightly higher against the yen at
92.47 yen.
The U.S. currency was within sight of some key support
levels, including a July low of 91.73 yen, and $1.4550 and
beyond against the euro.
For a chart on euro/dollar's technicals, click:
http://r.reuters.com/qev55d
Options traders said option triggers were set at $1.4550
while chart targets were seen at $1.4620, a 61.8 percent
Fibonacci retracement of its fall from above $1.60 in July 2008
to its October low near $1.2330.
UBS analysts cut forecasts for the dollar on "equity markets
continuing to do well in the short term and U.S. investors still
continuing to diversify portfolios into overseas markets."
In a note, they raised their 1-month euro/dollar forecast to
$1.45 from $1.40 and 3-month forecast to $1.35 from $1.30.
The dollar index <.DXY>, which tracks the performance of the
greenback versus a basket of six other major currencies, was
flat at 77.300, near a one-year low of 77.047 hit on Tuesday.
For a graphic of the dollar index's technical levels, click:
http://r.reuters.com/caw55d
The Australian dollar hit a one-year peak of $0.8662
<AUD=D4> and touched its highest in almost a month around 80.00
yen <AUDJPY=R>, although softer-than-expected retail sales took
the wind out of its sails, pushing the Australian currency down
0.2 percent on the day to $0.8594.
The New Zealand dollar was last down 0.1 percent at $0.6943
<NZD=D4> after hitting a one-year high of $0.6993.
Its peak comes ahead of a Reserve Bank of New Zealand
meeting on Thursday, with expectations it will repeat that it
wants to keep rates low well into 2010.
Sterling was flat, holding near two-week highs versus the
dollar as markets awaited Thursday's outcome of the Bank of
England's two-day policy meeting. The BoE is expected to keep
rates unchanged and its asset-buying scheme untouched, although
there is some speculation of further easing. []
Due later on Wednesday is the Federal Reserve's Beige book,
a summary of economic conditions in 12 Fed districts. Data on
Tuesday showed U.S. consumer credit fell by a record $21.6
billion, raising concerns about the pace of recovery.
(Additional reporting by Tamawa Desai in London and Charlotte
Cooper in Tokyo; Editing by Chris Pizzey)
