* Disappointing China trade data heightens global demand concerns
* ECB seen likely to ease, but investors ponder extent
* BoE's Carney to give testimony to lawmakers
By Anirban Nag
LONDON, March 8 The safe-haven yen rose while the low-yielding euro gained against the dollar on Tuesday as downbeat Chinese trade data fuelled concerns about the state of global demand, weighing on appetite for riskier assets and currencies.
China's February exports slumped 25.4 percent from a year earlier while imports dropped 13.8 percent.
The dollar fell 0.5 percent to 112.85 yen, after earlier hitting a one-week low of 112.75 yen. The euro, was up 0.2 percent at $1.1042, pulling away from a one-month low of $1.0825 struck on March 2.
Both currencies tend to outperform during times of financial market volatility and economic uncertainty as investors in both regions unwind investments abroad and bring their savings home.
"The disappointing data from China is weighing on risk sentiment and pushing the dollar lower against the yen," said Yujiro Goto, currency strategist at Nomura.
The euro, however, underperformed the yen, falling 0.2 percent to 124.65, with the euro generally clouded by Thursday's policy review by the European Central Bank.
The ECB is expected to ease policy, but investors are uncertain about how far it will go. Euro bears are cautious about positioning for bold action, having been badly burnt before when the ECB disappointed by choosing to take more modest easing steps.
"We think the central bank will once again struggle to beat high expectations, with the euro not likely to suffer significantly after the announcement," BNP Paribas analysts wrote in a note to clients.
In the UK, the focus will be on testimony from Bank of England Governor Carney and Deputy Governor Jon Cunliffe at the Treasury Select Committee and where they will be asked about the economic and financial consequences of a potential exit by the UK from the European Union.
Late on Monday, the BoE announced it offer three additional liquidity operations around the referendum time in June.
The Australian and Canadian dollars pulled away from multi-month highs touched on a rally in commodity prices. Commodity prices, including oil were lower on Tuesday.
The Aussie fell 0.5 percent to $0.7430 after reaching a high not seen since July, of $0.7486 on Monday. The Canadian dollar climbed as far as C$1.3262 per USD, scaling a peak last seen in November, but the greenback was last up 0.3 percent at C$1.332. (Additional reporting by Lisa Twaronite; Editing by Hugh Lawson)
