NEW YORK, Sept 18 (Reuters) - The dollar climbed against most major currencies on Friday, coming off a one-year low against the euro as waning risk appetite cut demand for higher-yielding currencies and other assets.
The dollar has retreated broadly since March as investors shifted into riskier assets due to increasing signs the global economy is recovering, and it extended its losses this week as equities and commodities rallied.
But the U.S. currency gained a respite on Friday as investors trimmed their positions ahead of holidays in Japan and Singapore next week, although the trend for broad dollar weakness was seen as likely to persist.
"The risk aversion, risk appetite trade has been going on for four or five months," said Joseph Trevisani, senior market analyst at FX Solutions in Saddle River, New Jersey. "Are we growing, are we not."
With no major U.S. data scheduled for release on Friday, foreign exchange investors are taking their cues from flows into equity and commodity markets.
Midway through the New York session, the euro EUR= dipped to $1.4722, down 0.1 percent from U.S. trading late on Thursday. It hit a one-year high on Thursday and has risen more than 2.7 percent so far this month.
The dollar index .DXY, which measures the dollar's value against a basket of six major currencies, rose 0.3 percent to 76.387, having bounced off Thursday's one-year low of 76.010.
"We've obviously had a fairly big move. There's not much in terms of news or catalyst to drive the market further ... It's just time for a period of consolidation after some big moves," said Derek Halpenny, European head of currency research at Bank of Tokyo Mitsubishi UFJ in London.
Comments by Russian Prime Minister Vladimir Putin that there was no threat to the United States from multiple reserve currencies had little
immediate effect on the market. [ID:nLI168886]
YEN PULLS BACK, STERLING SLUMPS
Against the yen, the dollar rose as high as 91.63 yen JPY= according to Reuters data, after Japanese Finance Minister Hirohisa Fujii said he did not want to be perceived as backing a strong yen. [ID:nTKU105559]
It was last up 0.2 percent at 91.24 yen, having rebounded from a seven-month low hit on Wednesday.
For the week, the euro rose 0.8 percent against the dollar. The dollar gained percent against the yen, the first week of gains in six trading weeks. The dollar index was 0.3 percent lower on the week.
Sterling hit a four-month low against the euro EURGBP= on news the UK had set tougher-than-expected conditions to the potential exit of Lloyd's Bank from a state-run scheme to protect its assets.
Britain's Lloyds Banking Group (LLOY.L) said on Friday it was weighing alternatives to the scheme to insure it against credit losses. [ID:nLI109343]
Sterling also slumped 1 percent to $1.6277 GBP=. The Australian dollar AUD= fell 0.5 percent to $0.8672, down from a 13-month high hit on Thursday. The New Zealand dollar fell 0.3 percent to $0.7086 NZD=, off a 13-month high hit on Thursday.
Source: reuters.com
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