* Oil sinks below $30 a barrel
* Aussie, kiwi, Canadian dollars all dive 1 pct or more
* U.S. dollar index edges down, though on track for weekly
gain
* Eyes on U.S. retail sales, Fed's Dudley
By Patrick Graham
LONDON, Jan 15 (Reuters) - The Australian, New Zealand and
Canadian dollars all sank on Friday on the back of another slide
in Chinese stock markets and an almost 5 percent tumble in oil
prices to less than $30 a barrel.
The dollar fell roughly half a percent against both the euro
and yen EUR= JPY= and China's yuan was also back under
pressure in offshore markets after Shanghai stock markets slid
to their lowest point since December of 2014. ID:nL8N14Y1QC
Sterling, however, hit another 5-1/2 year low of $1.4331
GBP=D4 , helping to limit the dollar index's overall loss to
just 0.2 percent against a basket of currencies. .DXY
"The oil market is just a mess and it all seems to be
stemming from that," said Tobias Davis, a currency hedging
manager with Western Union in London.
Richard Benson, co-head of portfolio management at currency
fund Millennium Global, said the Canadian dollar - down by a
third in value against its U.S. counterpart since 2012 - was
suffering from bets on more easing of monetary policy next week.
"A lot of people are expecting the Bank of Canada to cut
rates again next week," he said. "Its about 50-50 priced and the
weakness of the currency might yet stop them. But dollar-Canada
roofed it this morning."
By 0839 GMT, the Canadian dollar had fallen to C$1.4518,
down 1 percent having hit a 13-year low of C$1.4545.
The Aussie dived 1.5 percent to an almost 7-year low of
$0.6870 and the kiwi dollar 1.1 percent to $0.6395. The
Norwegian crown weakened by almost 1 percent to 9.6205 crowns
per euro.
All of that looked like the latest leg of a now deep-rooted
concern in markets over the outlook for global growth and prices
of commodities and other traditionally higher-risk asset
markets.
Euro-dollar rates have largely ridden that out, but a
handful of events over the next week should put the divergence
of economic growth and monetary policy on either side of the
Atlantic back at the front of investors' minds.
U.S. retail sales data on Friday are accompanied by an
appearance by New York Federal Reserve President William Dudley.
That all prefaces a European Central Bank meeting next week eyed
for more signs on further policy easing this year.
"Generally all of this still comes down to the dollar and
the diverging policies we've seen," said Brenda Kelly, chief
market analyst at London Capital Group.
"This uncertainty dates back to the dollar's gains against
the yuan in August. Those abated in December enough to let the
Fed raise rates. But there is a chance that the strong dollar
and the fall in commodities prices may mean the Fed will row
back on those commitments."
(Editing by Mark Heinrich)