FOREX-Risk revival hurts dollar, European rate cuts awaited

* Aussie, euro recover as risk revival hurts U.S. dollar

* Rate cuts loom in euro zone, Britain, Australia

SINGAPORE, Nov 3 (Reuters) - The U.S. dollar retreated on
Monday, after recording its biggest monthly gain in more than
17 years in October, on signs of some revival in risk appetite
as investors anticipate another round of interest rate cuts by
major central banks.

Asian stock markets were higher, the Aussie dollar AUD=
rallied nearly 3 percent from Friday's lows and the Japanese
yen JPY= surrendered some of its gains even though traders
had their doubts about how long the revival would last.

"It feels like risk apetite is returning slowly to the
market, so some of the yielders are better bid and in general
U.S. dollar is offered," said Gerrard Katz, head of north Asian
FX trading at Standard Chartered Bank.

Trading was thinned by a Japanese holiday on Monday.
Equally, traders were unwilling to trust the rally in the euro
and in risky assets ahead of various events this week,
including the U.S. presidential election on Tuesday
[ID:nN02470309].

The European Central Bank, the Bank of England and the
Reserve Bank of Australia are all expected to lower rates to
support their struggling economies from the threat of a looming
global recession.

They are all seen easing by at least 50 basis points. Last
week, the U.S. Federal Reserve cut its key rate by 50 basis
points to 1 percent and the Bank of Japan (BoJ) cut its rate to
0.30 percent from 0.50 percent.

Emerging giants China and India also cut rates last week.

By 0430 GMT, the euro was up 0.75 percent at $1.2845
EUR=, having lost about 9.6 percent in October -- the single
currency's worst monthly performance since its launch in 1999.

The Aussie was at $0.6807, while the yen was at 99.26 per
dollar, compared with 98.66 late in New York on Friday.

"We could see more volatility this week with the U.S.
election and ECB now fully expected to cut 50 basis points,"
Katz said, but he added that the euro would find support around
last week's lows.

Last week, the euro fell to its weakest level in 2-½
years against the dollar.

Still, after last week's plunge in U.S. consumer confidence
and data showing a sharp fall in U.S. home prices in August,
the risk of a rapid deterioration in the world's other
economies threatened to scupper any pick up in risk appetite.

"The focus this week is clearly on some of the major
central banks and it is hard not to see the disease that
started in the United States spreading to other economies,"
said Robert Rennie, chief currency strategist at Westpac, in
Sydney.

Rennie added that investors were also likely to get a
reminder of the weakness in the U.S. economy from key jobs data
on Friday.

A Reuters poll shows the U.S. economy is likely to have
shed 200,000 jobs in October with the unemployment rate rising
to 6.3 percent as tight credit conditions force companies to
cut costs.

A manufacturing survey due on Monday is also expected to
show sluggish activity extending into October, backing views
that the world's largest economy has slipped into a recession.

On Friday, data showed a steep drop in business activity in
the U.S. Midwest, while a Commerce Department report showed
consumers cut monthly spending for the first time in two years
in September.

Elsewhere, the New Zealand dollar NZD= gained slightly as
stocks there rallied, but with seemingly little reaction to
data showing a record rise in labour costs in the third quarter
and a fall in jobs.

The report did little to alter expectations of further
interest rate cuts in New Zealand to follow last month's 1
percentage point cut to 6.5 percent. [nWEL378505]
(Additional reporting by Anirban Nag in Sydney; Editing by
Neil Fullick) ((vidya.ranganathan@thomsonreuters.com;
+65-68703090; Reuters Messaging:
vidya.ranganathan.reuters.com@reuters.net)) Currency bid prices
at 0458GMT. All data taken from Reuters with percent change
calculated from the daily U.S. close at 2130GMT.

Last US Close %Chg YTD % 2007 Cls

.
-------------------------------------------------------------
Euro/dlr EUR= 1.2838 1.2751 +0.68 -12.00 1.4589
Dlr/yen JPY= 99.16 98.66 +0.51 -10.93 111.33
Euro/yen EURJPY= 127.30 125.85 +1.15 -21.68 162.53
Dlr/swiss CHF= 1.1511 1.1597 -0.74 +1.55 1.1335
Stg/dlr GBP= 1.6232 1.6093 +0.86 -18.21 1.9847
Dlr/can CAD= 1.1966 1.2125 -1.31 +20.09 0.9964
Aus/dlr AUD= 0.6809 0.6634 +2.64 -22.25 0.8757
Euro/swiss EURCHF= 1.4781 1.4778 +0.02 -10.63 1.6539
Euro/stg EURGBP= 0.7910 0.7920 -0.13 +7.63 0.7349
Nzd/dlr NZD= 0.5927 0.5825 +1.75 -22.68 0.7666
Dlr/Norw NOK= 6.6292 6.7242 -1.41 +21.98 5.4347
Euro/Norw EURNOK= 8.5130 8.5822 -0.81 +7.37 7.9283
Dlr/Swed SEK= 7.6617 7.7396 -1.01 +18.56 6.4622
Euro/Swed EURSEK= 9.8418 9.8710 -0.30 +4.36 9.4304
All spots FX= Tokyo spots AFX= Europe spots EFX=
Volatilities FXVOL= Tokyo Forex market info from BOJ TKYFX
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