LONDON, Nov 12 - The dollar fell to one-week lows versus the euro on Wednesday as a lack of major U.S. data so far this week encouraged investors to take profits on global recovery bets. The absence of a U.S. data driver left stocks lacklustre, removing a key dollar support, with Wall Street's Dow Jones share average <.DJI> seeing its first three-session streak of losses since October. Meanwhile, a holiday affecting U.S. bond markets overnight and the previous session's surprisingly robust ZEW survey of investor expectations for Germany gave European data a rare spotlight. "Whenever we don't have any news from the U.S., the dollar tends to suffer. It needs a constant stream of good news to get euro/dollar lower," said Lee Ferridge, head of global currency strategy at Rabobank. "We haven't had any releases since Friday's U.S. payrolls, so that is why we are here." At 0851 GMT, the dollar was down half a percent against the euro at $1.1562 . Earlier it had fallen to $1.1583, its lowest since early November. The buoyant euro was also up nearly half a percent against the yen at 125.69 . The Japanese currency was flat versus the dollar at 108.70 after recent wariness over intervention by Tokyo to stem the yen's rise against the greenback.
DATA, TRADE TENSIONS
The U.S. data drought was set to wear on during Wednesday's session. In Europe, the German Council of Economic Advisers was scheduled to hold a news conference about the annual survey on the German economy at 1200 GMT. Investors are largely geared up for Friday's comments by Federal Reserve Chairman Alan Greenspan at the opening of a conference on monetary policy and data on retail sales and U.S. consumer sentiment. Until then markets have found dollar-negative factors to focus on, especially rising global trade tensions after the World Trade Organisation's highest court ruled on Monday that U.S. duties on steel imports violated global trade agreements. The European Union says it could start imposing sanctions on $2.2 billion of U.S. goods between December 6 and 15 if Washington does not scrap the duties. Dealers say the danger to the dollar would not be from the EU sanctions themselves but the threat that tensions could escalate. "A trade dispute could be negative for capital markets. Overall it would hurt global trade and be a bad sign for corporate profitability," said Hans-Guenter Redeker, chief foreign exchange strategist BNP Paribas. "That has also held back capital markets from performing and with the weaker performance people put cyclical currencies under some pressure, and especially the dollar."
INTERVENTION WARNINGS
Japan's top financial diplomat, Zembei Mizoguchi, told reporters that the Japanese authorities would act "as and when needed" in the foreign exchange market but he declined comment on whether they had intervened in the past few days. Traders were also looking at where the Nikkei share average <.N225> was headed after it tumbled for three straight days this week and closed at a three-month low on Tuesday. "Once the Nikkei breaks below 10,100-10,200 support, it's a selling signal from a technical point of view. Since Japanese stock demand from overseas investors was a key supporting factor for the yen, such a drive could weaken it," said Junya Tanase, a currency strategist at JP Morgan Chase. The Nikkei average <.N225> ended Wednesday trade up 0.19 percent at 10,226.22.//