LONDON, Aug 18 (Reuters) - The dollar and the yen fell against the euro and perceived higher-risk currencies on Tuesday, dented by rising equity and oil prices, while investors anticipated an improvement in Germany's ZEW survey.The dollar is generally softer, but risk appetite remains fragile and vulnerable to disappointment from today's batch of U.S. and European data," RBC analysts said in a note to clients. Elsewhere, sterling rose 0.3 percent to $1.6389 GBP=, with investors cautious ahead of UK inflation data at 0830 GMT, which is expected to show annual CPI falling to 1.5 percent in July from 1.8 percent in June ECONGB.
The higher risk Australian dollar rose 0.5 percent against the U.S. dollar to $1.8249 AUD= and by 1.3 percent against the yen to 78.50 yen AUDJPY=R.
Earlier, the Australian central bank said in the minutes to its last meeting that it would start to raise interest rates if the local economy continues to recover as forecast, and that further easing was unlikely.
Policymakers were concerned, however, that the strength of household demand could prove temporary, particularly if it tightened too early.
The ZEW investor sentiment index for August, due at 0900 GMT, is forecast to rise to 45.0 from 39.5 in July, according to a Reuters poll, on optimism over improvements in the global economy and the country's export sector ECON.
Analysts said a firmer reading would encourage the view that the global economy is over the worst of a downturn, helping risk appetite to recover.
They added that investors were also covering short positions built the previous day in the euro and higher risk currencies such as the Australian dollar, when they fell to their lowest against the dollar and the yen in more than two weeks.
European shares rose 0.6 percent .FTEU3 after suffering their biggest drop in six weeks during the previous session, while U.S. S&P 500 stock futures SPc1 gained and oil prices also recovered CLc1.
"S&P futures are pointing higher and we are seeing a rebound in riskier currencies," said Arne Lohmann Rasmussen, head of FX research at Danske Bank in Copenhagen.
"We think the ZEW could surprise to the upside, which would confirm that a cyclical recovery is taking place, and the upbeat mood will continue," he added.
At 0800 GMT, the euro rose 0.3 percent against the dollar to $1.4121 EUR= after falling as low as $1.4045 on Monday on the EBS trading platform. Against the yen it jumped 1 percent to 134.35 yen EURJPY=R, recovering after touching a low of 132.51 yen on Monday.
The dollar also rose 0.7 percent to 95.12 yen JPY= after dipping to its lowest in nearly three weeks on Monday at 94.19 yen.
Analysts, however, said Monday's rebound in risk appetite could be shaken in the event of disappointing economic data, with U.S. housing starts and producer prices figures also due later in the day.
