(Changes dateline, byline, updates prices, quotes)
By Meg Clothier
LONDON, Nov 6 (Reuters) - The dollar struck fresh all-time lows against the euro and a basket of major currencies in early European trade on Tuesday as the market retained its negative assessment of the U.S. economy.
"Sentiment versus the dollar is very, very bearish. As far as the euro/dollar goes there is no new news, we are seeing momentum selling and it is likely to continue," said Adarsh Sinha, currency strategist at Barclays Capital.
Strong U.S. economic last week data failed to put a floor under the dollar's broad slide against the single currency and persistent fears about credit risks also continued to hurt the greenback.
Citigroup's Sunday announcement that it may write off $11 billion of subprime mortgage losses has stirred worries that more write-downs could surface. The bank also saw its credit rating downgraded on Monday.
"There are renewed concerns about credit problems, with spreads widening over the last week and that is negative to the dollar. It increases the downside risk to growth and suggests this will be more important moving ahead relative to inflation risks," Sinha added.
The Federal Reserve's statement after it cut its benchmark rate last month had said "the upside risks to inflation roughly balance the downside risks to growth".
By 0826 GMT the euro had risen 0.38 percent to $1.4519 <EUR=>, having peaked at $1.4532 according to Reuters, surpassing a record high of $1.4528 set on Friday.
The dollar index (.DXY: Quote, Profile, Research), which tracks the greenback's progress against a basket of six major currencies, dipped as far as 76.175, the lowest in its more than 30-year history.
"The U.S. dollar has suffered from firm commodity prices, strong flows into emerging markets, and continued (reserve) diversification, and we expect the dollar to stay weak for now," UBS said in a note.
U.S. light crude (CLc1: Quote, Profile, Research) rose more than 1 percent to $95.10 a barrel, climbing back towards the record high above $96 set last week. Gold <XAU=> surged to fresh 28-year highs on Tuesday.
RISK APPETITE HURTS YEN
The yen, however, slipped broadly as gains in stock markets pointed to a pick-up in risk appetite and encouraged investors to re-enter risky carry trade bets funded by cheap borrowing in the Japanese currency.
The yen inched lower against the dollar to 114.70 yen <JPY=>, compared with around 114.50 yen in late U.S. trading on Monday.
The yen also fell 0.61 percent against the euro to 166.61 <EURJPY=R> and slipped against the high-yielding New Zealand and Australian dollars <NZDJPY=R> <AUDJPY=R>.
The Australian dollar rose ahead of the Reserve Bank of Australia's interest rate decision expected on Wednesday, gaining 0.62 percent against the dollar to $0.9255 <AUD=>, near a 23-year peak around $0.9345 hit last week.
The RBA is seen likely to raise interest rates by 25 basis points to an 11-year high of 6.75 percent.