* Euro hits fresh 9-month low vs dollar
* Drop in euro extends after drop in German industrial
* Dollar index hits fresh 11-month peak
* Kiwi dented by fall in dairy prices, mixed NZ jobs data
By Masayuki Kitano and Ian Chua
SINGAPORE/SYDNEY, Aug 6 The euro slipped to a
nine-month low on Wednesday, extending its losses after data
showed a sharp drop in German industrial orders, while the New
Zealand dollar took a hit after a fall in dairy prices.
A Singapore-based trader said investor risk aversion on
concerns about the tensions in Ukraine helped to bolster the
dollar broadly, and weighed on the euro.
The euro fell to as low as $1.3349, its lowest level
since November. It last stood at $1.3361, down 0.1 percent on
The common currency weakened after data showed that German
industrial orders in June posted their biggest monthly fall
since September 2011 as geopolitical developments and risks made
companies more cautious about taking on contracts.
That helped lift the dollar to a fresh 11-month high against
a basket of major currencies. The dollar index rose to as high
as 81.637, its highest level since last September.
Helping to support the dollar, data on Tuesday showed that
the U.S. services sector activity hit an 8-1/2 year high last
month and factory orders surged in June, bolstering expectations
of solid economic growth in the third quarter.
"We're back into the medium-term trend, which is for a
higher dollar," said Jesper Bargmann, head of trading for Nordea
Bank in Singapore.
Over time the euro is likely to head lower versus the
dollar, due to a divergence in the outlook for monetary policies
of the United States and the euro zone, he said.
Bargmann said that while the market was already short the
euro, he expects these bearish bets could grow further.
In addition to the European Central Bank's policy meeting on
Thursday, the focus will be on forthcoming U.S. economic data
and whether they come in strong enough to push forward market
expectations for the timing of a Fed rate hike, he added.
The dollar held steady versus the yen near 102.58.
The standout currency in Wednesday's Asian trade was the New
Zealand dollar, which skidded to a two-month low after milk
prices fell again at an auction held by Fonterra Co-operative
Group, the world's biggest dairy exporter.
It extended its decline on data showing a moderation in jobs
growth at home, an outcome that some suspect could buy the
central bank more time to stay on the sidelines following four
successive interest rate hikes this year.
The latest retreat in equities and risk sentiment also
dented the New Zealand dollar, said Hamish Pepper, a currency
strategist for Barclays in Singapore.
"It's a confluence of factors, all negative for the kiwi
dollar at the moment," Pepper said, adding that a focal point is
whether support for the kiwi at its early June trough near $0.84
The kiwi dropped 0.4 percent to $0.8436, having
fallen as far as $0.8423, its lowest level in two months.
(Editing by Shri Navaratnam and Richard Borsuk)