FOREX-Dollar, yen firm on risk aversion; BoE cuts rates

* Dlr, yen benefit from risk aversion

* Stg bounces as BoE delivers 50 bps rate cut, as expected

* Euro slides, weak data keeps pressure on ECB

(adds quotes, updates prices)

By Veronica Brown

LONDON, Jan 8 (Reuters) - The dollar and yen rose at the expense of higher-yielding currencies on Thursday as falling shares tempered risk demand, while the euro came under selling pressure as dismal data highlighted concerns about a deteriorating euro zone economy.

Sterling bounced to three-week highs versus the dollar and the euro after the Bank of England met market expectations with a 50 basis point interest rate cut to 1.5 percent, continuing attempts to buffer the UK economy from a deep recession.

The dollar built momentum versus higher-yielding currencies as worries about the global economy slapped oil prices down some 12 percent on Wednesday, pressuring commodity currencies like the Australian and New Zealand dollars lower.

This helped the U.S. currency recover some losses suffered in the previous session after a disastrous reading of U.S. employment, but the dollar fell against the yen, which benefited from risk aversion as share prices in Asian and Europe fell.

The dollar hit a session low versus the yen after disappointing sales figures from Wal-Mart Stores Inc (WMT.N), the world's largest retailer, which also cut its quarterly earnings outlook on Thursday [ID:nL8478360].

The Dow Jones industrial average .DJI had fallen 244.68 points, or 2.71 percent, to 8,770.42, while stock futures pointed to a lower Wall Street open later on Thursday.

Figures on Wednesday showed a 693,000 decline in U.S. private jobs in December, hitting home the view the U.S. economy is deteriorating fast with global reverberation.

"The market is very nervous. You get a couple of good days where people come out of the woodwork and then the Dow falls and everyone is away again," said Lee Ferridge, currency strategist at State Street Global Markets.

"Much will depend on the Dow today, if it comes back we'll see the commodity currencies come back," he added.

By 1245 GMT, the dollar .DXY was little changed against a currency basket at 82.073. Yen strength pushed the euro down 1.4 percent to 124.44 yen EURJPY=, while the dollar was down 1.3 percent at 91.38 yen JPY=. The Australian dollar was down 1 percent at $0.7033 AUD=.