GLOBAL MARKETS - Euro falls after ECB growth warning; stocks mixed

By Natsuko Waki

LONDON (Reuters) - The euro tumbled to a 5-month low against the dollar after the European Central Bank's chief highlighted downside growth risks and oil prices fell, while European stocks halted a global sell-off in equities.

After leaving interest rates on hold at 4.25 percent on Thursday, ECB President Jean-Claude Trichet said he expected euro zone growth to weaken substantially this year even though he saw inflation staying above the central bank's target.

There is growing evidence that economic problems are spreading to other parts of the world from the United States, the epicentre of the 1-year-old credit crisis. Royal Bank of Scotland became the latest to reveal the extent of damage by reporting a first-half loss of 691 million pounds.

"We're seeing a shift away from a focus on the United States to a more global problem," said Sharada Selvanathan, currency strategist at BNP Paribas in Hong Kong. "The dollar is getting a boost by default."

While RBS's loss was one of the biggest in UK corporate history, it was not the catastrophe some had feared, helping to stabilise other banking stocks. This pushed the FTSEurofirst 300 index up 0.3 percent.

The MSCI main world equity index fell 0.5 percent, off earlier lows.

The dollar rose 1 percent against a basket of major currencies while it strengthened as far as $1.5141 per euro, nearly 10 cents above record lows set last month.

The September Bund future rose 4 ticks.