FOREX-Dollar lower against euro, up against yen on risk appetite

Reuters

* Euro up against dollar on increased risk appetite

* Dollar gains against yen

* China official lifts hopes for stimulus (Updates prices, add analyst, changes byline, dateline, pvs LONDON)

By Sam Forgione

NEW YORK, March 28 (Reuters) - The dollar edged lower against the euro on Friday while rising against the yen on greater investor risk appetite after comments from a Chinese official indicated the government could implement a fresh round of stimulus.

China's Premier Li Keqiang sought to reassure global investors that Beijing was ready to support the cooling economy, saying the government had the necessary policies in place and would push ahead with infrastructure investment.

The comments helped push the euro up against the dollar while weighing on the safehaven yen. The euro tends to attract buyers during periods of greater risk.

The increased appetite for risk also showed in a rise in the U.S. stock market.

"There has been a risk-on move in the currency market," said Shahab Jalinoos, currency strategist at UBS in Stamford, Connecticut.

Traders also said they doubted that the European Central Bank would implement further monetary easing at its meeting on April 3, despite statements from ECB policymakers on Tuesday hinting at the potential for more easing to fight deflation.

The statements have weighed on the euro this week, since the monetary easing would aim to fight deflation and weaken the euro currency.

The euro was last up 0.04 percent against the dollar, rebounding from an earlier three-week low, to trade at $1.3746.

The rate cut doubts persisted even as German consumer prices harmonised with other EU countries rose by 0.3 percent on the month and 0.9 percent on the year in March, according to preliminary data from the Federal Statistics Office Friday, which fell below a Reuters forecast.

"I have a hard time believing many are looking for a rate cut next week," said David Gilmore, a partner at Foreign Exchange Analytics in Essex, Connecticut.

He noted Germany's economic growth would not encourage the ECB to further ease.

The dollar was last up 0.71 percent against the yen to trade at 102.9. The U.S. dollar index, which measures the dollar against six major currencies, was last up 0.13 percent at 80.217.

(Additional reporting by Anirban Nag in London; Editing by Sophie Hares)

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