* Dollar index reverses loss, up 0.1 percent at 85.870 * Yen supported on persistent global economy fears
* Euro down broadly, euro zone inflation plunges
* Dealers cite dollar buying ahead of PM fixing
(recasts, adds quotes, updates prices)
By Jessica Mortimer and Veronica Brown
LONDON, Nov 28 (Reuters) - The dollar gained traction against major currencies on Friday, rising as fears about the depth and breadth of a global recession reasserted influence on sentiment.
Increased wariness of risk helped push European shares into negative territory <.FTEU3, while the low-yielding yen gained ground.
The euro faced broad pressure with tumbling euro zone inflation seen leaving the European Central Bank with room to cut interest rates more aggressively from the current benchmark rate of 3.25 percent.
Provisional figures showed euro zone annual inflation plunged to 2.1 percent in November from 3.2 percent in October.
"Shares are struggling and clearly this is related to risk aversion. Unless we get more durable equity support then the trend for dollar and yen gains will probably be the order for the day," Rabobank currency strategist Jeremy Stretch said.
Traders also said talk of sizeable month-end dollar buy-orders at the London 1600 GMT currency fixing was adding support to the U.S. unit.
By 1119 GMT, the dollar was 0.1 percent higher against a basket of six major currencies at 85.870, while the euro fell 0.4 percent to $1.2834.
The single currency dropped 0.7 percent to 122.22 yen, while the dollar dipped 0.1 percent to 95.21 yen.
Activity was thinner ahead of the U.S. market open later in the day after the Thanksgiving holiday.
MORE RATE CUTS EYED
Looking ahead to next week, market participants were bracing for interest rate decisions by several central banks next week, including the Bank of England, the European Central Bank, the Reserve Bank of Australia and the Reserve Bank of New Zealand.
Calyon strategists said in a note to clients that while European sentiment continued to point to weak growth, the ECB might still opt for a more measured approach to monetary policy.
"We still suspect that the Governing Council will plump for a 50 basis point cut next week, suggesting that policy disappointment could weigh on the euro toward the end of next week," they added.
For the UK, economists polled by Reuters on Thursday expect the BoE will follow up November's shocking 150 basis point interest rate cut with at least a 50 point chop when it meets next week
(Reporting by Veronica Brown; Editing by Ron Askew)