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FOREX-Dollar near 11-yr high after Chinese rate cut, eyes on ECB
* Dollar hits 11-year high vs basket of currencies
* Jumps to 2-year high vs China's yuan after rate cut
* All eyes on euro as ECB prepares to launch quantitative easing
* Aussie central bank seen cutting rates on Tuesday (Recasts after start of European trade, changes dateline from previous TOKYO/SYDNEY)
By Patrick Graham
LONDON, March 2 (Reuters) - The dollar hovered around an 11-year high against a basket of major currencies on Monday, helped by the fallout from a cut in Chinese interest rates which added to renewed pressure in the past week on the euro.
Dealers and analysts in London, where 60 percent of the world's currency trade is done, said the main theme of the next week would be how markets will deal with the launch of outright money-printing by the European Central Bank.
The bank is expected to lay out the details for its quantitative easing programme of bond buying, due to start this month, at a news conference on Thursday and the euro has been falling steadily in the run in.
It was down just under 0.1 percent against the dollar in early European deals, having sunk to a 5-week low after the People's Bank of China (HKSE: 3988-OL.HK - news) cut rates on Saturday.
"Be it U.S. or Chinese data that is the trigger, the euro right now is vulnerable," said Jane Foley, a strategist focussed on G10 major currencies at Rabobank in London.
"There is a conviction that it will be foreigners who are going to sell bonds to the ECB rather than euro zone investors and that should have a negative effect on the euro."
The dollar rose to as high as 95.505 against a basket of major currencies, its highest level since September 2003. It last traded at 95.376.
Against the yen, it was trading at a two-week high of 119.965 yen up 0.2 percent on the day. It hit a two-year high against China's yuan after the rate cut.
Another factor in the dollar's rise was the fall back of both the Australian and New Zealand dollars after initial gains on the cut in Chinese rates.
Many analysts had been convinced that Australia's Reserve Bank would hold fire on another rise in interest rates this week but the signs of concern over the pace of Chinese growth are just the latest in a run of poor economic news.
Similar concerns over growth have afflicted the kiwi dollar in recent weeks and both currencies were down half a percent on the day early on in Europe, having gained around a half a percent after the Chinese rate cut.
"The disappointing economic data ... suggests to us that the Reserve Bank would see little value in waiting for further confirmation of the need for additional stimulus to the economy," analysts from Australian bank ANZ said in a note.
"Rate cuts by the People's Bank of China over the weekend are a further sign of relative weakness in China's economy and a further sign that monetary policy globally is typically being eased outside of the United States." (Editing by Toby Chopra)
