* Yen climbs to 7-week high vs dollar, 1-1/2-month peak vs euro * Dollar index rises to one-week high * Sterling drops as UK negative rates talk escalate * Graphic: World FX rates in 2020 tmsnrt.rs/2RBWI5E (Recasts, adds new comment, U.S. data, FX table, updates prices, changes byline, dateline; previous LONDON) By Gertrude Chavez-Dreyfuss and Sinéad Carew NEW YORK, Sept 17 (Reuters) - The safe-haven yen rose to a seven-week high against the dollar and a 1-1/2-month peak versus the euro, amid another batch of generally weak U.S. data and overall uncertainty about the economic outlook, backing the Federal Reserve's concern on Wednesday about the pace of recovery. The dollar index rose to a one-week high, but was last little changed on the day, as risk appetite diminished. Shares on Wall Street were lower and U.S. Treasuries were fairly well-supported. At Wednesday's policy meeting, the Fed pledged to keep rates near zero until the labor market reaches "maximum employment" and inflation is on track to "moderately exceed" the 2% target, with most policymakers seeing rates on hold through at least 2023. "What we've seen in the aftermath of the Fed meeting is a bit of a risk-off tone and one of the things that's come back into play since early September is a realignment of FX and equity correlations so the consolidation of the dollar remains intact and there's some negative bias in the risk space," said Mazen Issa, senior FX strategist, at TD Securities. "It's helping to put a little more downside pressure on some of the majors." Wednesday's set of U.S. data also added to the gloom in risk sentiment. U.S. jobless claims remained elevated at 860,000, while both housing starts and the Philadelphia Fed business index fell. "Taken together, this morning's data releases suggest that – despite positive momentum – there is a long way to go until pre-pandemic levels of activity are achieved," said Matthew Eidinger, market strategist, at Cambridge Global Payments. He added that against a soft economic backdrop, the Fed's commitment to hold rates near zero for some time appears well-justified. "It is clear that the economy needs all the help it can get, from monetary and fiscal policymakers alike," Eidinger said. In late morning trading, the dollar fell 0.3% against the yen to 104.62 yen, after sliding to a seven-week low of 104.52. The euro dropped 0.3% to 123.60 yen. Earlier it touched a low of 123.33 yen, its weakest level since late July. The dollar index, a measure of its value against six major rivals, was last little changed at 93.12 , but hit a one-week high earlier in the session. The euro briefly hit a one-month low earlier at $1.1737 before trimming some losses to stand 0.1% lower on the day at $1.1809. The Australian, New Zealand and Canadian dollars, tied to commodity prices as well as the ebbs and flows of risk appetite were all weaker on the day. That said, with the new guidance from the Fed focused on keeping U.S. interest rates at current record lows until employment and inflation reach its targets, some strategists argue any dollar strength is likely to be temporary. The pound fell 0.4% to $1.2916 after the Bank of England said it had been briefed on how a negative interest rate could be implemented effectively, should it be needed.. ======================================================== Currency bid prices at 10:42AM (1442 GMT) Description RIC Last U.S. Close Pct Change YTD Pct High Bid Low Bid Previous Change Session Euro/Dollar EUR= $1.1811 $1.1814 -0.03% +5.37% +1.1819 +1.1738 Dollar/Yen JPY= 104.6500 104.9400 -0.28% -3.87% +105.1600 +104.5300 Euro/Yen EURJPY= 123.63 123.99 -0.29% +1.38% +124.0800 +123.3300 Dollar/Swiss CHF= 0.9098 0.9092 +0.07% -5.99% +0.9138 +0.9089 Sterling/Dollar GBP= 1.2939 1.2965 -0.20% -2.41% +1.2998 +1.2866 Dollar/Canadian CAD= 1.3207 1.3176 +0.24% +1.70% +1.3247 +1.3169 Australian/Doll AUD= 0.7291 0.7305 -0.19% +3.85% +0.7311 +0.7255 ar Euro/Swiss EURCHF= 1.0748 1.0744 +0.04% -0.96% +1.0757 +1.0729 Euro/Sterling EURGBP= 0.9128 0.9110 +0.20% +7.97% +0.9170 +0.9084 NZ NZD= 0.6730 0.6731 -0.01% -0.09% +0.6738 +0.6676 Dollar/Dollar Dollar/Norway NOK= 9.0731 9.0193 +0.60% +3.36% +9.1345 +9.0190 Euro/Norway EURNOK= 10.7229 10.6590 +0.60% +9.00% +10.7535 +10.6570 Dollar/Sweden SEK= 8.8051 8.7944 +0.06% -5.81% +8.8664 +8.7972 Euro/Sweden EURSEK= 10.4015 10.3953 +0.06% -0.65% +10.4298 +10.3942 (Reporting by Gertrude Chavez-Dreyfuss; Additional reporting by Saikat Chatterjee in London; Editing by Andrea Ricci)
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