FOREX-Dollar falls as Korea talk offsets trade worries

* Trade war concerns limit appetite for riskier currencies

* Greenback hit weakest level vs Korean won since late January

* Euro rebounds to 2-week peak vs dollar after Sunday elections

(Updates market action, changes dateline, previous LONDON) NEW YORK, March 6 (Reuters) - The dollar slipped to a one-week low on Tuesday against a basket of currencies as traders piled back into riskier currencies after an agreement between North and South Korea to hold direct talks. The dollar had already been weakening on worries about a trade war due to U.S. President Donald Trump's proposed tariffs last week on imported steel and aluminium. The currency, seen as a safe-haven against risk in recent months, fell further after news of the North and South Korea talks as investors bought the Australian and New Zealand dollars and emerging market currencies. "It's too early to wholeheartedly buy these currencies because of the chances of escalating trade tension between U.S. and its trading partners," said Omer Esiner, chief market analyst at Commonwealth Foreign Exchange in Washington. North and South Korea, still technically at war but enjoying easing tension since the Winter Olympics in the South last month, will hold their first summit in more than a decade next month, South Korea said on Tuesday. It also said North Korea is willing to hold talks with the United States on denuclearization and will suspend nuclear tests while those talks are under way. This offset worries about Trump's proposed levies, which has prompted protests from Europe, Canada and other countries. At 11:09 a.m. (1609 GMT), the dollar fell 0.557 points or 0.62 percent, against a group of currencies to 89.523. It also touched its weakest level against the South Korean won since Jan. 25. It was last down 1.38 percent, at 1,061.81 won. Among higher-yielding currencies, the New Zealand dollar was up as much as 1.2 percent on the day and the Aussie up more than 1 percent. Against the yen - traditionally seen as a safe haven - the dollar had slipped as low as 105.86 yen, not far from the 16-month low it reached late last week after Trump said he would impose tariffs of 25 percent on steel imports and 10 percent on aluminium. The yen was last down 0.21 percent, at 105.97 yen. The euro rebounded to a two-week high of $1.2414 on Tuesday after a selloff on Monday following elections in Italy and Germany.

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Currency bid prices at 11:10AM (1610 GMT)

Description RIC Last U.S. Close Pct Change YTD Pct High Bid Low Bid Previous Change

Session

Euro/Dollar EUR= $1.2417 $1.2335 +0.66% +3.51% +1.2420 +1.2330 Dollar/Yen JPY= 105.9600 106.1900 -0.22% -5.96% +106.4600 +105.8600 Euro/Yen EURJPY= 131.58 130.98 +0.46% -2.66% +132.0100 +130.6100 Dollar/Swiss CHF= 0.9371 0.9398 -0.29% -3.82% +0.9418 +0.9360 Sterling/Dollar GBP= 1.3896 1.3848 +0.35% +2.84% +1.3929 +1.3818 Dollar/Canadian CAD= 1.2889 1.2963 -0.57% +2.48% +1.2994 +1.2864 Australian/Doll AUD= 0.7825 0.7764 +0.79% +0.31% +0.7842 +0.7757

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Euro/Swiss EURCHF= 1.1636 1.1592 +0.38% -0.45% +1.1649 +1.1594 Euro/Sterling EURGBP= 0.8935 0.8907 +0.31% +0.59% +0.8937 +0.8906 NZ Dollar/Dolar NZD= 0.7303 0.7224 +1.09% +3.06% +0.7311 +0.7222 Dollar/Norway NOK= 7.7696 7.8188 -0.63% -5.33% +7.8285 +7.7453 Euro/Norway EURNOK= 9.6493 9.6461 +0.03% -2.02% +9.6585 +9.6107 Dollar/Sweden SEK= 8.2134 8.2613 +0.10% +0.14% +8.2737 +8.2057 Euro/Sweden EURSEK= 10.2010 10.1904 +0.10% +3.68% +10.2085 +10.1791

All spots FX= Tokyo spots AFX= Europe spots EFX= Volatilities FXVOL= Tokyo Forex market info from BOJ TKYFX World central bank news CEN

Economic Forecasts... ECON Official rates...INT/RATE Forex Diary.......MI/DIARY Top events........M/DIARY

Diaries...........DIARY Diaries Index........IND/DIARY Press Digests.....PRESS Polls on G7 economies..SURVEY/ European markets......MARKETS/))

(Additional reporting by Jemima Kelly in London Editing by Larry King)