* Dollar gains broadly, risk appetite improves
* Oil prices support dollar
* Euro hits record high against yen
(Recasts, adds comments, updates prices, changes byline,
dateline, previous LONDON)
By Wanfeng Zhou
NEW YORK, July 23 (Reuters) - The dollar hit a one-month
peak against the yen and a two-week high against the euro on
Wednesday, getting support from a slide in oil prices and a
recovery in risk appetite.
With oil more than $20 below this month's record peaks
<CLc1> and world stocks on a six-day winning streak for the
first time in two months <.MIWD00000PUS>, the improved risk
appetite also pushed the low-yielding, safe-haven yen to a
record low against the euro as investors sought higher returns
elsewhere.
"We're seeing a bit of a broad dollar rally against most of
the G10 currencies this morning," said Dustin Reid, senior
currency strategist at investment bank ABN Amro in Chicago.
"We're seeing, in general, some positive (corporate)
earnings news as well as lower oil prices, which are both
helping the dollar sentiment this morning across the board," he
said. "There seems to be a decent amount of risk appetite out
there across asset classes."
In early trading in New York, the dollar climbed to its
highest level in a month at 107.92 yen <JPY=>, according to
Reuters data, before easing back slightly to trade up 0.4
percent at 107.75 yen.
The euro had fallen as low as $1.5719 <EUR=>, its weakest
level since July 10 and more than 3 U.S. cents below last
week's record high of $1.6037, according to Reuters Dealing. It
last traded at $1.5751, down 0.2 percent on the day.
Adding to the euro's downside was data showing euro zone
new orders falling at their fastest monthly pace in 6-1/2
years.
Reflecting improved risk appetite, the dollar rose to a
one-month high of 1.0365 safe-haven Swiss francs <CHF=>, while
the euro scaled a two-month peak at 1.6305 francs <EURCHF=>.
The euro also rose to a record high at 169.98 yen <EURJPY=>
according to Reuters data before pulling back to 169.72 yen.
In the oil market on Wednesday, U.S. crude futures fell
further to $126.91 per barrel <CLc1>, down 1.2 percent, giving
the dollar a generally bid tone.
The greenback also continued to benefit from comments from
Philadelphia Federal Reserve President Charles Plosser, who
said on Tuesday that rising inflation could force the Fed to
start raising interest rates even before labor and financial
markets recover.
BEIGE BOOK, MORE DATA AHEAD
The latest clues on the state of the U.S. economy were
expected at 2 p.m., when the Federal Reserve was scheduled to
release its Beige Book of economic conditions.
Analysts said that a bumper data day on Thursday -- along
with oil price and equity developments -- would also be key in
determining whether the slide in euro/dollar lasts or soon
gives way to another try at the $1.60 level and above.
U.S. existing home sales will vie for attention with German
Ifo business sentiment survey and euro zone flash PMIs.
"We remain cautious in chasing the dollar higher at
present, but if the earnings season concludes without incident,
and key euro zone data continue to deteriorate, EUR/USD may
turn decisively," investment bank UBS said in a research note.
"Disappointment with tomorrow's Ifo release may open the
way to further EUR/USD downside," UBS said.
The biggest loser among the majors was the New Zealand
dollar, which slipped nearly 1 percent to US$0.7513 <NZD=>
after New Zealand finance company Hanover Finance said it was
suspending repayments of existing loans and interest.
Analysts said there could be scope for a recovery, though,
if the Reserve Bank of New Zealand leaves rates on hold at 8.25
percent on Thursday, disappointing minority bets for a cut.
The outlook for British monetary policy is less clear, with
Bank of England minutes on Wednesday showing one policy-maker
unexpectedly voted for a rate hike this month, in addition to
an as-forecast call for a cut from arch-dove David
Blanchflower.
The outcome boosted sterling across the board, pushing the
euro to 78.62 pence <EURGBP=>, the lowest since June 20.
Against the dollar, the pound rose 0.5 percent to $2.0011.
(Additional reporting by Toni Vorobyova in London; Editing by
Jonathan Oatis)
