FOREX-Swissie, yen cash in on rising risk aversion

* Dollar down 0.5 pct at 106.26 yen, 1.0194 Swiss francs

* Record high oil prices, falling stocks fan risk aversion

* Russian reserve diversification comments help Swissie

(Updates prices, changes byline, recasts)

By Toni Vorobyova

LONDON, June 27 (Reuters) - The yen and the Swiss franc rallied to three-week highs versus the dollar on Friday, benefiting from a pick-up in risk aversion due to record high oil prices and slumping stocks.

The Swissie got an extra boost after the Russian central bank said it will increase the currency's share in its $558.7 billion gold and forex reserves [ID:nL27239347].

The oil price hit a record $141.75 a barrel, bringing its gains for the first half of the year to over 47 percent CLc1 and reinforcing global inflation concerns.

This benefited the euro thanks to expectations of an inflation-busting European Central Bank rate hike in contrast to the Federal Reserve, which disappointed some investors this week by signalling it is in no hurry to start tightening policy.

"There is a bout of risk reduction across assets. It started from the Fed u-turn, which put the dollar under pressure. Oil prices headed up and that's putting more pressure on equities," said Martin McMahon, FX strategist at Credit Suisse in Zurich.

"It's probably got further to run and being in the Swiss franc is a good place to be, and in the yen to a certain extent as well."

The euro slipped to a two-week low of 1.6040 Swiss francs EURCHF= while the dollar hit its lowest since June 9 at 1.0168 francs CHF=.

The yen added 0.4 percent to reach a three week high of 106.17 per dollar JPY= and strengthened versus the euro EURJPY=.

The euro rose to a three-week high of $1.5782 before trimming gains to stand at $1.5767 by 0949 GMT EUR=.

FIXING INFLATION

The single European currency showed little reaction to euro zone economic sentiment falling more than expected this month to a three year low of 94.9.

Analysts reckon the data won't deter the ECB from raising rates to 4.25 percent next week.

Illustrating the inflation problem, Spanish June consumer inflation hit a record high of 5.1 percent, inflation rose in five German states and French producer prices rose 1.3 percent in May from the previous month, more than double the market consensus.

EU Economic and Monetary Affairs Commissioner Joaquin Almunia said on Friday that euro zone inflation will stay high for longer than previously expected and oil and food prices may rise further.

In the United States, the extent of price pressures will be seen with the 1230 GMT release of the core personal consumption expenditure (PCE) data.

The Fed's favourite inflation measures is seen rising 0.4 percent on the month in May, but with growth slowing the U.S. central bank has less scope for rate hikes than its euro zone counterpart.

As such an above forecast inflation reading may actually be negative for the dollar according to ING, which expects annual core PCE to rise 2.1 percent.

"Any higher would be bad news for asset markets on the view that the Fed would have to hike regardless of the economic impact," ING said in a research note.

(Editing by Gerrard Raven)