* Euro, pound under pressure
* Pound also weakened by surprise drop in industrial output
* Sterling drops to one-week low of $1.4855 <GBP=D4>
* Aussie, NZ dlrs hit multi-month highs on China trade data
(Adds quote, update prices)
By Tamawa Desai
LONDON, March 10 (Reuters) - The euro and sterling fell on Wednesday as investors fretted over credit concerns, while the Australian dollar touched seven-week highs after robust Chinese trade data.
The pound, already under pressure, dipped after an unexpected drop in UK industrial production data for January. [ID:nONS004855] Trade-weighted sterling <=GBP> fell to an 11-month low.
By 1023 GMT, sterling was down 0.6 percent at $1.4909, after falling to $1.4885, its lowest since March 2. Stop-loss sales were seen below $1.4880, traders said.
Sterling maintained its downtrend after falling on Tuesday on weak economic data, worries about Britain's creditworthiness, and political uncertainty. It has lost more than 7 percent against the dollar this year on concerns Britain may be stuck in political deadlock after an election expected in May.
The euro fell 0.1 percent to $1.3566 <EUR=> after hitting a session low of $1.3546. The single currency was hurt on Tuesday after Fitch Ratings said it still had a negative outlook on Portugal's credit rating. [ID:nLDE6281JZ]
That fed concerns that peripheral euro zone economies may face debt problems similar to those of Greece, where a fiscal crisis has led investors to flee the euro in past weeks.
"Fiscal concerns are resulting in extreme pessimism for both currencies in the near term," said Lee Hardman, currency economist at Bank of Tokyo-Mitsubishi UFJ.
ROBUST CHINESE TRADE
Data on Wednesday showed Chinese exports and imports surged past expectations in February, underscoring the momentum in the world's third-largest economy. [ID:nTOE62906P]
Commodity-linked currencies rose after the release of the Chinese economic report, with the Australian dollar climbing to a seven-week high against the U.S. dollar.
"They (Australian and New Zealand dollars) are benefiting from good Chinese data which suggest that the economy there is expanding strongly. Due to the close trade ties, this should also result in corresponding momentum for the economies of Australia and New Zealand," Commerzbank analysts said in a note.
The Australian dollar rose as far as $0.9168 <AUD=D4>, its highest since Jan. 20, according to Reuters data.
The New Zealand dollar <NZD=D4> rose 0.6 percent to a three-week high of $0.7076. New Zealand's central bank is expected to keep interest rates unchanged when it announces its policy decision due at 2000 GMT.
The yen retraced recent gains made on expectations of Japanese repatriation flows before the fiscal year-end on March 31.
"Historically, March is a time when the yen rises on repatriation flows, but its impact is not long-lasting," said BTM-UFJ's Hardman.
That is because Japanese investors usually channel funds into overseas assets when the new fiscal year begins in April.
Furthermore, speculation the Bank of Japan would ease monetary policy as early as next week will likely weigh on yen.
The dollar was up 0.4 percent against the yen at 90.33 yen <JPY=>. Support was seen around the 89.30 yen level, which forms the base of the Ichimoku cloud, traders said.