LONDON, Aug 17 (Reuters) - The euro hit a two-week low against the yen on Monday and struggled versus the dollar as weak global shares and oil prices ruined traders' appetite for risk and battered currencies seen to be high-risk.
The yen rallied across the board, while the higher-yielding Australian and New Zealand dollars retreated from 10-month highs hit late last week.
Figures showed Japan's economy grew in the second quarter, pulling out of recession, but analysts said the yen's gains were being driven more by risk aversion rather than the strength of the data.
"For the time being, risk appetite is going to be the dominant driver of G10 currencies," said Michael Klawitter, senior currency strategist at Dresdner Kleinwort in Frankfurt.
Risk demand was stung as Chinese stocks extended losses earlier in the day, and analysts said investors would likely continue cutting long positions in risky assets and buy the yen and the dollar back if other asset markets continue to struggle.
By 0751 GMT, the euro EUR= had fallen 0.6 percent to the day's low of $1.4116, according to Reuters data. Against the yen EURJPY=R, it fell around 1 percent to 133.45 yen, its lowest level since late July.
European shares were down 1.7 percent and oil prices fell to a two-week low.
RISK AVERSION WEIGHS
Broad yen gains pushed the dollar JPY= down to 94.38 yen according to electronic trading platform EBS, its weakest in roughly two weeks, while the Australian dollar and sterling each fell around 1 percent against the Japanese currency to their lowest points since the end of last month.
The Australian and New Zealand dollars each fell around 1.5 percent against the U.S. dollar, retreating after both currencies late last week hit their highest levels since autumn. The dollar index .DXY rose 0.4 percent to 79.179.
Market participants said investors remained cowed after U.S. data late last week showed consumer confidence fell in August for the second consecutive month and revived concern about the U.S. economic turnaround. [ID:nN14304812].
Data showing Japan's economy grew for the first time in five quarters in the April-June period did little to help weak sentiment, even as the economy expanded 0.9 percent on the quarter and ended its longest recession in decades on the back of exports and government stimulus spending.
