FOREX-Dollar slides on G20-fuelled risk appetite, IMF
* Dollar falls broadly after G20, U.S. jobs data
* No rush to withdraw stimulus boosts risk appetite
* Euro eyes $1.50 EUR=, dollar index 75.00 .DXY
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LONDON, Nov 9 (Reuters) - The dollar weakened broadly on Monday after a G20 meeting and U.S. jobs data did little to alter the view that U.S. interest rates will stay low for some time, offering investors little incentive to buy the currency.
Sterling, also aided by position adjustments and talk of merger and acquisition-related demand, hit a three-month high against the greenback, the euro closed in on $1.50 and higher-yielding currencies like the Australian and New Zealand dollars jumped.
The conviction that U.S. -- and other -- interest rates will remain low for the forseeable future and liquidity still plentiful boosted demand not just for non-dollar currencies but for a range of other assets from equities to gold.
"We have positive equity markets so we have risk appetite. And that is still a dollar negative. People are buying into higher yielding currencies or currencies where rates are going higher," said Niels Christiensen at Nordea in Copenhagen.
"It's difficult to pinpoint any reason to hold or buy the dollar. So the dollar is still the preferred funding currency," he said.
Currency traders noted that the Group of 20 finance ministers and central bankers meeting at the weekend did not dwell on exchange rates, suggesting policymakers were not too concerned with the dollar's weakness.
Some dealers also cited an International Monetary Fund report as also weighing on the dollar. The report said that while the dollar had depreciated in recent months, it still remained on the "strong" side. See r.reuters.com/kyp48f.
After a week of central bank meetings, including the Federal Reserve, a gathering of Group of 20 finance officials at the weekend ended without the countries taking any concrete action to rebalance global flows or talk more specifically about the dollar's recent decline [ID:nLQ516726].
"Since dollar weakening can itself facilitate global rebalancing, the failure to discuss currencies implies continued comfort among authorities with recent depreciation," Citigroup currency strategists wrote in a research note on Monday.
At 0830 GMT the dollar index was down 0.8 percent .DXY at 75.23, while the euro EUR= rose 0.8 percent to $1.4970, coming back within sight of last month's 2009 high of $1.5064.
Sterling also gained, rising 1 percent to its highest in three months at $1.6801 GBP=D4.
Data from the Commodity Futures Trading Commission on Friday showed that speculators had substantially decreased their net short sterling positions to 18,905 contracts in the latest week from 31,431 contracts in the prior week. [ID:nN06202899]
Some traders also noted the 1700 GMT deadline for Kraft (KFT.N) to make its formal takeover bid for the British confectionery group Cadbury (CBRY.L) or walk away for six months.
FUNDING CURRENCY
The dollar was up against the even lower-yielding yen by 0.2 percent at 90.10 yen JPY=.
The dollar and the yen JPY= had initially risen on Friday after the U.S. unemployment rate jumped to a 26-1/2 year high of 10.2 percent, but both have slid back since the G20 meeting.
"The (U.S. jobs) numbers mean the Fed will keep rates low for some time to come and U.S. dollar will be the preferred currency for carry trades," said Jonathan Cavanagh, currency strategist at Westpac.
The Australian dollar advanced back towards its high for the year above $0.93 AUD=, helped by a pick-up in Australian housing finance, while the New Zealand dollar jumped 1.4 percent to $0.7360 NZD= after dairy giant Fonterra lifted its forecast pay-out to farmers.
European stocks were up 1 percent .FTEU3, while U.S. stock futures pointed to Wall Street gains of more than 0.5 percent.
The head of the Federal Reserve's St Louis branch, James Bullard, told the Financial Times that he did not favour tightening until the recovery was well-established and suggested rates could stay near zero for all of next year. [ID:nN08210474]
Investors will be watching to see how U.S. Treasury yields respond to this week's record November refunding, while also keeping an eye on a batch of Chinese data for October due on Wednesday, which will include the consumer price index, industrial output data and retail sales. ECONCN
