FOREX-Dollar, yen rally on shift to safe haven

* Doubts about economy send investors to safe havens

* Dollar index on track for biggest weekly gain since June

* Euro, commodity FX tumble as equity markets post losses

* Euro on pace for biggest weekly loss since April (Adds comment, detail, updates prices)

By Wanfeng Zhou

NEW YORK, Oct 30 (Reuters) - The dollar and yen rallied on Friday as a sharp sell-off in the stock market and uncertainty about the economy boosted safe-haven demand for the U.S. and Japanese currencies.

The dollar headed for its first weekly gain in four and its biggest weekly advance since June against a basket of currencies as data painted a mixed picture of the U.S. economy, underscoring the fragility of a recovery.

Major indexes on Wall Street fell more than 2 percent as euphoria sparked by Thursday's third-quarter gross domestic product report faded and an accounting expert projected a $10 billion write-down for Citigroup Inc . For details, see [ID:nN30433397].

"The main driver is equities," said Nick Bennenbroek, head of currency strategy at Wells Fargo in New York. "You're still seeing the relationship between the dollar and the equity market holding intact."

For much of the past year, the dollar has been taking its cue from swings in risk sentiment, rising when disappointing economic data hurts risk appetite and falling when the data points the other direction.

In late trading, the euro fell 0.8 percent to $1.4707. The euro zone currency was down 1.9 percent on the week, on pace for its worst weekly performance since mid-April.

The ICE Futures dollar index <.DXY>, a measure of the greenback's value against six major currencies, rose 0.6 percent to 76.401 and was up 1.3 percent on the week, its best weekly gain since June.

Data on Friday showed U.S. consumers cut spending in September while sentiment turned gloomier this month. A separate report showed factory activity in the U.S. Midwest expanded for the first time in more than a year, but employment conditions deteriorated. [ID:nN30482062]

"The U.S. data deluge proved decidedly mixed today, failing to support the 'feel good effect' from the blockbuster U.S. GDP report yesterday," said Michael Woolfolk, senior currency strategist at BNY Mellon in New York.

SWISS FRANC FALLS

The dollar fell 1.5 percent to 89.99 yen, a two-week low. The yen also gained as the Bank of Japan said it would stop buying Japanese corporate bonds and commercial paper, starting a withdrawal process from the credit market. See [ID:nT32693].

That meant the BoJ would be reducing the volume of its currency in the market, a move that should boost the yen.

The yen also rose sharply against other major currencies. The euro fell 2.4 percent to 132.35 yen , sterling dropped 2.3 percent , while the Australian dollar lost more than 3 percent

Against the U.S. currency, the Australian dollar dropped 1.9 percent to US$0.8984 and the New Zealand dollar lost 2.3 percent to US$0.7161 .

The Swiss franc fell amid talk of intervention on behalf of the Swiss National Bank to weaken the currency. The bank declined to comment. [ID:nWEA7901]

Traders said the market got nervous about intervention because the euro had fallen to levels around 1.5080 francs where the SNB had already intervened this year.

The euro jumped as high as 1.5180 against the Swiss franc , according to electronic trading platform EBS, its highest since mid-October.

The dollar rose as high as 1.0275 francs, according to Reuters data, and last traded at 1.0260, up 0.8 percent. (Additional reporting by Gertrude Chavez-Dreyfuss; Editing by Kenneth Barry)