* Risk-sensitive dlr falls as stock markets extend rally
* Euro/dollar vaults $1.30 as key resistance gives way
* G20 spun into mild positive for sentiment
* Focus on Fed, BOJ policy meetings this week
(recasts, adds quotes, updates prices)
By Veronica Brown
LONDON, March 16 (Reuters) - The euro hit its highest in over a month versus a broadly weaker dollar on Monday, with five consecutive days of rallying share prices reflecting less investor caution towards risk.
A Group of 20 finance ministers meeting which ended on Saturday made no specific mention of currencies, but analysts said money promised to help emerging market economies and use of fiscal and monetary power to fight the global downturn had played into improved stock market sentiment.
European share indexes rose around 2 percent in early trade , with U.S. stock futures also pointing to a higher open on Wall Street as assurances on the U.S. banking sector led to outperformance of financials.
"The G20 statement just reflects the mood of the market at the moment, if something changes on mood people are reluctant to stand in the way. For now that means the dollar weakens," said Daragh Maher, deputy head of global FX research at Calyon on London.
"But if you take a step back and think about what has changed you struggle to identify things that give a reason to be more bullish on risk appetite. I'm not a convert," he added.
By 1120 GMT, the euro was up 0.9 percent on the day at $1.3037 after hitting its highest since mid-February at $1.3045, according to Reuters data.
The dollar fell to 86.589 against a basket of major currency rivals. Reflecting easing risk aversion, sterling rose in tandem with rallying British shares and was last up 1.4 percent against the dollar at $1.4205.
The dollar was 0.3 percent higher at 98.27 yen after rising as high as 98.50 on demand from Japanese importers. But exporters' selling capped further dollar gains, traders said.
WHAT WILL THE FED SAY?
This week markets are keeping a keen eye on the Federal Reserve and Bank of Japan policy meetings as central banks turn to exceptional measures to keep interest rates consistently low to stimulate growth.
Traders are waiting to see if the Fed signals after its meeting on Tuesday and Wednesday that it will buy longer-dated Treasuries to help keep interest rates down.
Fed Chairman Ben Bernanke suggested in an interview that the U.S. recession could last most of the year.
UBS strategists said in a note to clients that the Fed was likely to be non-committal on buying long-dated debt.
"The Fed has recently shied away from actively talking about quantitative easing, even though the Bank of England and Swiss National Bank have already proceeded with such measures."
Britain's central bank has bought gilts, and the Swiss National Bank intervened in currency markets last week to weaken the Swiss franc to stave off deflation.
The SNB shocked markets by selling the franc, becoming the first major central bank in the current crisis to try to push its currency down. Market players expect further intervention if the currency starts to rise again.
"When equity markets start to reverse and risk starts to sell-off, then that's the time when you're going to see the SNB," said RBS strategist Paul Robson.
The euro hit a 12-week high of 1.5422 francs on Monday, up around 0.4 percent on the day.
The Bank of Japan also meets this week and may increase its monthly buying of long-dated government bonds to keep interest rates low and help boost the economy, Japan's Nikkei business newspaper reported.
The BOJ is also considering buying banks' subordinated debt to help bolster their capital, the paper said. (Additional reporting by Kirsten Donovan; Editing by Toby Chopra)