FOREX-Euro rises on hopes of Italian budget compromise

* Euro rises before European Commission responds to Italybudget
* Italy Deputy PM open to reviewing fiscal plans, newspapersays
* Dollar falls amid fears of global growth
* Yen down, sterling up as investors await Brexitdevelopments

* Graphic: World FX rates in 2018 By Tom Finn

LONDON, Nov 21 (Reuters) - The euro rose on Wednesday,buoyed by reports that Italy may be open to reviewing its draftbudget for 2019, potentially easing a confrontation with theEuropean Union.

The European Commission is set to take the first step onWednesday towards disciplining Italy over its draft fiscal plan.

But a report that Italian Deputy Prime Minister MatteoSalvini may be open to reviewing the government's 2019 budgethelped support Italian government bond markets and the euro onWednesday.

The newspaper La Stampa said Salvini was ready to reduce theplanned spending on a citizen's income and the unwinding of aprevious pension reform. At 0830 GMT, the euro traded up 0.3 percent at $1.14. . The single currency has risen in six out of the last seven sessions.

"The potential for a further tussle between Rome andBrussels can have an impact on the overall Eurozone economicgrowth, which will keep the euro under pressure," said MichaelMcCarthy, chief markets strategist at CMC Markets.

The euro's strength weighed on the dollar index, a measureof performance against six major currencies, which fell 0.2percent to 96.621. The index gained 0.65 percent the daybefore.

The dollar has been supported by investors seeking out thesafe haven currency on mounting concern about global growth anda U.S.-China trade war.

With another rout in global equities on Tuesday, risk-aversetraders sought shelter in the dollar, which climbed from atwo-week low hit earlier on Tuesday.

The dollar has been under pressure this week partly fromcomments by Federal Reserve officials expressing concern about apotential global slowdown. Those comments led some investors tobet the rate-hike cycle was near its end. The Japanese yen fell 0.15 percent to trade at112.86.

Despite its safe-haven status, the yen's strength has beenmuted. Analysts suspect this is because Japanese investors havekept their money in U.S. and foreign markets, rather than bringit home.

The British pound traded up 0.2 percent at $1.2808after losing 0.5 percent against the dollar on Tuesday. Thepound is expected to trade sideways until the market gets moreclarity on progress in the Brexit deal.

The Canadian dollar dropped to a four-month lowversus the dollar to trade at 1.3305 as the price of crude fell to its lowest level in more than a year. Canada isone of the world's top oil exporters.

Elsewhere, the Australian dollar , often considereda barometer of risk appetite, gained 0.3 percent to trade at$0.7236. The Aussie dollar lost more than 1 percent on Tuesdayas global risk sentiment worsened.

(Additional reporting by Vatsal Srivastava, editing by LarryKing) Disclaimer: The views expressed in this article are those of the author and may not reflect those of Kitco Metals Inc. The author has made every effort to ensure accuracy of information provided; however, neither Kitco Metals Inc. nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in commodities, securities or other financial instruments. Kitco Metals Inc. and the author of this article do not accept culpability for losses and/ or damages arising from the use of this publication.