Euro dips after disappointing German data

LONDON (AFP) – The European single currency lost ground against the dollar on Tuesday after a closely-watched survey showed sentiment among German investors dipped slightly in November.

The euro was down at 1.4964 dollars in late afternoon trading in London, compared to 1.4994 late in New York on Monday. The euro also lost against the Japanese unit, falling to 134.44 yen from 134.89 yen previously.

The dollar meanwhile dipped to 89.84 yen from 89.95 yen late on Monday.

The pound also dropped against both the dollar and the euro after international ratings agency Fitch warned Tuesday that Britain was the country most at risk of losing its top-level AAA credit assessment.

"Because of the scale of the fiscal adjustments required to stabilise and reduce public debt, the UK faces the largest medium term challenge" to reduce it, said David Riley, group managing director.

"On that basis it is fair to say that -- among other AAA-sovereigns like the United States, France and Germany -- it is the most at risk of a negative rating action," he added.

The euro rose to 0.8969 pounds late on Tuesday from 0.8945 pounds late on Monday, while the pound also fell to 1.6686 dollars from 1.6759 dollars before.

In Berlin, the ZEW research institute meanwhile said sentiment among German investors fell in November an indexed 51.1 points from 56.0 points in October.

The fall was worse than expected by analysts polled by Dow Jones Newswires.

But analysts played down the result and instead looked ahead to eurozone growth figures due on Friday set to show a recovery is underway in Europe.

"Overall, recent data bodes well for eurozone third-quarter GDP, due to be reported on Friday," said Frederik Ducrozet, an economist at French investment bank Calyon.

The euro is seen as a riskier and higher-yielding bet on currency markets and therefore tends to do better when there is greater economic confidence, while the dollar is regarded as a safe-haven in more troubled times.

The dollar had fallen sharply on Monday after the Group of 20 nations pledged in their joint statement at a meeting in Scotland to maintain economic stimulus measures, while refraining from commenting on foreign exchange issues.

Elsewhere, gold eased on Tuesday after striking an all-time peak of 1,111.20 dollars an ounce on Monday in response to rising demand from emerging economies and a decline in the value of the dollar.

In London late on Tuesday, the euro was changing hands at 1.4964 dollars against 1.4994 dollars late on Monday, at 134.44 yen (134.89), 0.8968 pounds (0.8945) and 1.5102 Swiss francs (1.5115).

The dollar stood at 89.84 yen (89.95) and 1.0092 Swiss francs (1.0079).

The pound was at 1.6686 dollars (1.6759).

On the London Bullion Market, the price of gold dipped to 1,101.50 dollars an ounce from 1,106.75 dollars an ounce late on Monday.