LONDON, Mar. 9 (MNI) - Continued risk aversion, Fitch warnings over Portugal credit grading and further Japanese exporter sales of euro-yen acted to extend euro-dollar's corrective pullback from Monday's recovery highs at $1.3705, with the rate touching a low of $1.3563 ahead of the New York open.

EURO SUMMARY: Opened in early Europe around $1.3620

aversion continued to drive trade. The rate met early support at $1.3597 (61.8% $1.3530/1.3705) before recovering back above the figure. The rate had opened Asia around $1.3632, with trade through this session contained within a tight $1.3607/36 range, with sales of euro-yen providing negative weight. Early sales in Europe saw the rate probe for stops below $1.3600, then recovering before faltering ahead of $1.3630. The rate reversed as the market again favoured risk aversion, prompted by Fitch warnings over a possible Portugal downgrade, with the rate breaking below the earlier base and triggering stops through $1.3580 to take it down to challenge support at $1.3570 (76.4%) by late morning trade. Bids remain in place around $1.3570, more at $1.3555/50. Resistance seen back at $1.3625/30.

US/FITCH: Fitch says US AAA rating secure in medium term.

CHINA: reported comments from Chinese officials Tuesday, * CHINA: Yi Gang, the head of China's foreign exchange reserve manager reiterated the government's cautious approach to exchange rate reform and warned against attempts to politicize the its massive purchases of U.S. Treasuries. * CHINA: China faces rising capital inflows speculating on yuan appreciation this year, in part the result of higher Chinese interest rates, the director of the State Administration of Foreign Exchange said in a statement. Yi Gang also confirmed that China's $2.4 tln in foreign exchange reserves are "appropriately diversified" among currencies including the dollar, euro and yen.

EUROZONE: Reported comments from eurozone officials Tuesday, * ECB NOYER: Fully backs France's new prudential control body - New financial control body to allow rapid response to crises - New body to assure banks won't take excessive risks * FRANCE/FITCH: Fitch sees French debt rise among highest of AAA's - France has strong finance flexibility as core EMU member - French deficit cutting plan based on optimistic assumptions * EU/FITCH: EU being ambiguous on bail-out issue - Not clear yet Greece contagion risk that severe - Sees possible EU bailout options available - Bailout to uncertain to build into Greek rating. - Question mark on Greek will to deliver cuts - Greece short term outlook OK; long term open to discussion * ECB WEBER: Germany price levels to rise 'very moderately' - Recovery in world economy is gaining strength - German recovery to continue but at slower pace - Recovery at different scales, speeds between regions -German exporters benefit from demand stimuli,especially ex-EMU - German labour market still in extremely robust shape - Bundesbank 2009 net profit totals E4.1bln vs E6.3bln in 2008 - BBK net profit drop mainly due to lower euro interest payment * GERMANY MERKEL: Face serious challenges with respect to the euro - Acknowledges Greece's demanding consolidation plan - Should improve Eurostat's ability to check data - Have common responsibility for euro's stability - Pleased that Greek government taking responsibility - Must restrain financial speculation; not forbid. * EU JUNCKER: European Monetary Fund not a solution.

EUROZONE: Press pick-ups concerning the eurozone Tuesday, * UK PRESS: Radical plans for a European version of the IMF to bail out crisis-hit countries would need a new treaty and the agreement of all EU member states, Angela Merkel, Germany's chancellor, warns, the FT reports. * US PRESS: Greek Prime Minister George Papandreou is pushing U.S. officials to investigate speculation in euro currency markets he says is driving up Greek borrowing costs, the WSJ reports.

EUROZONE: Data released in the eurozone Tuesday, * FRANCE: Jan sa trade deficit E3.681bln vs Dec -E4.155bln - Jan trade balance above expected; MNI median -E4.0bln

YEN SUMMARY: Opened in early Europe around Y89.92 and Y122.34

the European morning. Exporter sales once again impacted the market as a Japanese name sold around the Y90.00 area. This was followed by a US investment house selling taking out the overnight low at Y89.87 and triggering more sales from macro accounts. This supply pushed dollar-yen down to Y89.65 where some profit taking was noted by European names. Traders were reporting some interesting levels approaching on the downside in dollar-yen. The Y89.40-50 zone is expected to provide some good support as this zone provided effective resistance previously and was seen as the breakout point to the topside. The Y89.41 level is the 50% Fibonacci retracement of the Y88.13 - Y90.68 rally and we have the base of the daily Ichimoku cloud at Y89.29. The cross-yen was heavy for much of the session, exporters and risk off activity continued as Fitch comments, and lower gold prices, weighed on the market.

JAPAN: Releases in Japan Tuesday, * MNI INSIGHT: Bank of Japan board members would have to consider ways to boost the impact of credit easing if they agreed conditions had shifted toward higher downside risks and they revised down their longer-term growth and inflation forecasts in the coming weeks. - At the moment, board members are divided over whether the pace of price drops is improving fast enough and how soon business investment will turn around later this year. Depending on the threat of a higher yen against the dollar, which would hurt exporter profit and thus dampen business sentiment, the BOJ board might not wait till end-April to mull over risks and take action, which could take the form of such moves as expanding its latest money market operation that has proven to be effective in guiding interest rates lower and fending off a steep rise in the yen.

JAPAN: Data released in Japan Tuesday, * Jan coincident indicator +2.5 points on month - Jan Leading indicator +2.4 points on month.

- John Webb London bureau (44 207) 634 1628 jwebb@marketnews.com

Rates in London Trading TIME EURO-USD USD-YEN CABLE EURO-YEN EURO-STG 0600 GMT 1.3620 90.00 1.5018 122.58 0.9069 0700 GMT 1.3605 89.95 1.4987 122.37 0.9077 0800 GMT 1.3620 89.94 1.4997 122.49 0.9081 0900 GMT 1.3598 89.85 1.4987 122.17 0.9073 1000 GMT 1.3597 89.74 1.4963 122.01 0.9087 1100 GMT 1.3570 89.76 1.4950 121.80 0.9078