FOREX-Euro weakens as equity-market selloff hits sentiment
* Euro falls as risk sentiment sours
* Yen, Swiss franc both gain on safe-haven bids
* Tech share slide, Fed caution had earlier hobbled dollar
* Graphic: World FX rates in 2018 (Adds quotes, details, updates prices)
By Tommy Wilkes
LONDON, Nov 20 (Reuters) - The euro fell from a two-weekhigh on Tuesday as a selloff in world stock markets andnervousness about Italian banks fed through to the currency,while boosting the Swiss franc and Japanese yen.
Earlier, cautious comments overnight by Federal Reserveofficials about the global economic outlook, weak U.S. data anda selloff on Wall Street had knocked the dollar and supportedthe single currency.
But the euro gave up its gains as a tech share slide spookedEuropean equities, Italian bank shares hit a two-year low andItalian bonds sold off again amid a continuing confrontationwith the European Union over Rome's budget plans.
"It's largely sentiment-driven. European markets have openedweaker and the Italian risk is still in the background and itdoesn't help the euro," said Alvin Tan, strategist at SocieteGenerale.
Persisting worries about the China-U.S. trade conflict andBrexit negotiations also kept investors jittery.
The euro fell 0.2 percent to $1.1430 at 1115 GMT, offthe day's lows but below a two-week high of $1.1472 reachedearlier.
With investor nerves high, the safe-haven Japanese yen added0.1 percent to 112.46 . The Swiss franc gained as much as0.4 percent versus the euro to 1.1339 francs beforeeasing slightly.
Measured against a basket of its peers, the dollar index edged higher, up 0.1 percent to 96.297, off its weakestin a fortnight.
The dollar has struggled in recent weeks as investors worryabout slowing U.S. economic growth.
Comments from Federal Reserve officials expressing concernabout a potential global slowdown have encouraged some investorsto bet the rate-hike cycle could be near its end. U.S. 10-year Treasury yields pulled backslightly, removing some support for the greenback.
Overnight, the dollar was also weighed down by weak U.S.housing data. "For the US equity market to stabilise, either the rest ofthe world will have to show better growth or the Fed will haveto moderate its stance. Both outcomes are U.S. dollar-negativeand explain why rising U.S. equity volatility has failed tospill over into emerging markets," Hans W Redeker, a MorganStanley strategist, wrote in a client note.
The Australian dollar skidded more than half a percentbefore recovering slightly to trade at $0.7271, down 0.3 percenton the day, pushed lower by fears of Chinese economic slodown.
The Aussie is viewed as a barometer of global risk sentimentgiven its sensitivity to Chinese demand for Australia's exports. Sterling was firmer against both the dollar and theeuro as Prime Minister Theresa May heads to Brusselsfor more Brexit talks. In cryptocurrency markets, Bitcoin lost another 10percent to below $4,500 as sentiment soured further. (Editing by Richard Balmforth)
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