(Updates prices, adds comment, changes byline, dateline; previous LONDON)
* Australian dollar down 0.5 percent after Chinese stocks drop
* Upcoming ECB meeting underpins euro
* Yen weakens, trade data raises spectre of recession
By Gertrude Chavez-Dreyfuss
NEW YORK, Oct 21 (Reuters) - The dollar rose against emerging market and commodity-linked currencies on Wednesday as Chinese stocks slid, while the yen dipped after Japanese trade data raised concerns about another recession in the world's third-largest economy.
The dollar, however, was little changed against the euro, as investors awaited Thursday's European Central Bank monetary policy meeting. Investors expect the ECB to keep interest rates steady and hold any announcement of further policy easing given Tuesday's solid batch of euro zone data.
China once again drew attention after the Shanghai Composite stock index .SSEC closed more than 3 percent lower, slumping towards the close in a resumption of recent volatile patterns. Other emerging market stocks were also shaky after recent data on the region hinted at a gloomy growth outlook.
"Risk aversion remains the underlying theme, keeping riskier currencies and assets under pressure," said Shaun Osborne, chief currency strategist at Scotiabank in Toronto.
In mid-morning trading, the Australian dollar, used as a proxy for Chinese investments because of Australia's huge trade links with China, fell 0.6 percent against the U.S. dollar to US$0.7213 AUD= . The New Zealand dollar also shed 0.3 percent versus the greenback to US$0.6718 NZD= .
The U.S. dollar advanced against many emerging market currencies as well, rising 0.9 percent against the Mexican peso to 16.6675 pesos MXN= . The U.S. currency was up 1.7 percent against the South African rand ZAR= at 13.5103 and was 1.1 percent higher versus the Brazilian real at 3.9488 reais BRL= .
The greenback, meanwhile, edged higher against the yen JPY= , rising 0.1 percent to 120 yen after Japanese exports grew at the slowest pace since mid-2014 mainly due to weakness in China. That also kept alive chances of more quantitative easing from the Bank of Japan, perhaps as early as the end of the month. urn:newsml:reuters.com:*:nL3N12I05T
The euro was flat against the dollar at $1.1343 EUR= but rose 0.1 percent versus the yen to 136.12 yen EURJPY= .
Traders said the euro is prone to some volatility ahead of the ECB meeting. While the bank is not likely to ease this month, investors remain wary of it hinting at more stimulus later this year.
ECB data on Tuesday showed euro zone banks had loosened lending standards more than expected in recent months despite global market volatility, somewhat moderating the need for the ECB to ramp up its trillion-euro asset-purchase program.