FOREX-US dollar rallies to one-year high versus euro

* Dollar index touches one-year high, euro hits year low

* New Zealand dollar hits 2-year low after rate cut

* RBNZ surprises market with hefty 50 basis point rate cut

(Recasts, updates prices, changes byline)

By Lucia Mutikani

NEW YORK, Sept 11 (Reuters) - The dollar scaled a one-year high versus the euro and a basket of currencies on Thursday, boosted by U.S. investors repatriating their overseas investments amid escalating worries about global growth.

But the rising risk aversion and news that the U.S. trade deficit for July widened to an unexpected extent pressured the greenback against the yen.

An unexpected 50 basis point interest rate cut in New Zealand pushed the kiwi dollar to a two-year low against its U.S. counterpart.

"The market is in repatriation mode and the dollar looks very healthy against most major currencies. Given the environment we are currently in, I wouldn't want to call a base in this move yet," said Steven Butler, director of FX trading at Scotia Capital in Toronto.

Worries about slower global growth have seen U.S. investors liquidating their positions in overseas equity and bond markets and repatriating the money back home. This has increased demand for dollars and given support to the currency, analysts said.

The ICE Futures U.S. dollar index, which measures the dollar's value against a basket of six major currencies, rose as high as 80.375 .DXY, a level not seen since September last year, according to Reuters data. It was last up 0.2 percent at 80.196.

Risk aversion stung the euro, and broadly boosted the low-risk and low-yielding yen. The euro tumbled to $1.3891 EUR=, its lowest level since September 2007. It was last trading around $1.3920, down 0.5 percent on the day.

Remarks by Jean-Claude Juncker, chairman of the Eurogroup forum of euro currency nations, that the single currency was still overvalued in real terms also added to pressure, and traders said there was scope for further losses.

"People are looking to sell into any (euro) rally. Today we should see a little bit of support between $1.3860 and $1.3840, but I wouldn't want to call a base in this move," Scotia's Butler said.

Against the yen, the dollar dropped to session lows around 106.13 yen JPY=, weighed down by a combination of weaker stocks and data showing that the U.S. trade gap expanded to $62.2 billion, its widest since March 2007.

News that the number of Americans remaining on state jobless benefits books rose 122,000 to 3.53 million in the week ended Aug. 30 also added to dollar selling against the yen. For details, see [ID:nN11418328].