* Euro helped by risk appetite after Chinese, German data * Heavy sovereign refinancing needs, weak euro zone economy cap rally * Australian dollar outperforms, hits record high versus euro By Neal Armstrong LONDON, Jan 3 (Reuters) - The euro rose on Tuesday as better-than-expected economic data boosted riskier assets and triggered short-covering but it was likely to remain pressured in 2012 on worries over high sovereign debts and low growth in the euro zone. Sentiment was boosted by a combination of better Chinese manufacturing and service data, while German unemployment fell more than forecast after Monday's manufacturing PMI showed less contraction than expected. Traders reported demand for euros from U.S. banks, pulling it away from an 11-year low against the yen touched the previous day and a 15-month low hit against the dollar last week. But persistent worries about high sovereign debt levels and a lack of policy solutions to the two-year-old euro zone debt crisis, which threatened to push the region's economy into recession, were expected to keep the euro under pressure. "There needs to be a sustained improvement in euro zone fundamentals for a prolonged rebound in the euro," said Valentin Marinov, currency strategist at Citi. "Concerns over Spain and Italy are still there and the risks from Greece are likely to continue to cloud the euro outlook, outweighing the positives coming from resilient German data." The euro rose 0.6 percent to $1.3034, above its 2011 trough of $1.2858 hit last week on trading platform EBS. Traders said stops were triggered through $1.3020 en route to the day's high of $1.3044, with offers reported up to $1.3050. "Generally we stick to the view that rallies in the euro should be sold into," said Manuel Oliveri, currency strategist at UBS in Zurich. Against the yen, the euro rose 0.5 percent to 99.95 . It fell to 98.71 in holiday-thinned trade on Monday, its lowest since December 2000. Investors are particularly concerned over Italy as it faces around 100 billion euros of redemption and coupon payments in the first four months of 2012, with 10-year borrowing costs near the crucial 7 percent level. Worries over Greece were reinforced after a government spokesman said it would have to leave the euro zone if it failed to clinch a deal on a second 130 billion euro bailout with its international lenders. AUSSIE BOOSTED One factor that could slow the euro's descent is market positioning. The latest U.S. Commodity Futures Trading Commission data shows net short positions held by currency speculators swelled to a record high. The euro may also get some reprieve if European policymakers make progress on steps to tackle the debt crisis in a series of meetings in January. French President Nicolas Sarkozy will meet German Chancellor Angela Merkel in Berlin on Jan. 9 for talks that are likely to centre on new rules to enforce budget discipline across the European Union. Finance ministers from the EU's 27 members will meet on Jan. 23 before their leaders hold a summit a week later. Earlier on Tuesday, the euro reached a record low versus the Australian dollar, below A$1.2600. The Australian dollar rose 1 percent versus the greenback to $1.0325, helped by a rise in equities. U.S. economic data will be a focal point for this week, starting with the ISM manufacturing survey on Tuesday. The dollar dipped 0.3 percent to 76.70 yen , not that far from a record low near 75.31 yen hit in late October, while it fell 0.5 percent against a currency basket to 79.749, below a near one-year high of 80.854 hit last week.

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