* Private investors sell U.S. assets in October
* Foreign purchases of U.S. Treasuries decline
* China buys zero U.S. Treasuries for the month
(Adds details, comment, market reaction, byline)
By Gertrude Chavez-Dreyfuss
NEW YORK, Dec 15 (Reuters) - The United States saw net capital outflows in October, as foreign private investors shied away from U.S. assets as a safe haven, while Americans increased their purchases overseas as the appetite for risk improved.
U.S. Treasury Department data on Tuesday showed that net overall capital outflows totaled $13.9 billion in October, reversing revised inflows of $127.6 billion the previous month.
Net long-term capital inflows, which excluded swaps, fell to $20.7 billion, from an inflow of $40.7 billion in September. This is a key gauge of foreign investor appetite because they exclude short-term transactions.
"The numbers are consistent with financial markets' behavior that October of moving away from the U.S. dollar as a safe haven as we saw stronger economic data around the world," said Vassili Serebriakov, senior currency strategist, at Wells Fargo in New York.
He cited the weak performance of the ICE futures' dollar index <.DXY> , which was down 0.5 percent in the month of October.
The dollar on Tuesday showed little reaction to the capital
flows report, holding gains versus the euro
The data also showed that private investors in October sold $32.1 billion in U.S. assets, a precipitous decline from purchases of $142.1 billion in September.
Increased buying by U.S. investors of overseas assets, totaling $542 billion in October, also contributed to the outflows from the United States, analysts said.
Official buyers, on the other hand, which include foreign central banks, bought $18.2 billion of U.S. securities from sales of $14.5 billion in September.
Of the official buyers, Brazil turned out to be the biggest purchaser of U.S. Treasuries, buying $11.3 billion and pushing its total holdings to $156.2 billion.
China, meanwhile, still the largest holder of U.S. Treasuries, did not buy the asset during the month of October, keeping its total at $798.9 billion.
Japan, the second largest owner of U.S. Treasuries, sold these bonds in October, with total holdings at $746.5 billion from $751.5 billion the previous month.
Overall, foreign purchases of U.S. Treasuries were down at $38.9 billion from $44.7 billion in September.
U.S. agency bonds also saw some selling, with foreign investors unloading $5.6 billion compared with sales of $1.8 billion in September.
U.S. equities, on the other hand, saw lower inflows in October to $10.5 billion from $15.7 billion the previous month. (Editing by Theodore d'Afflisio)