* Dollar index inches up, recovers from 4-month low
* Lingering banking worries offer some support
* Dollar hovers near series of lows vs euro, Aussie, kiwi
(Adds quotes, comment, updates prices, changes byline and dateline. pvs TOKYO)
By Kirsten Donovan
LONDON, May 11 (Reuters) - The dollar inched higher on Monday, after earlier hitting its lowest in seven weeks against the euro, as investors turned cautious ahead of European banking results.
Emboldened by data showing slowing U.S. job losses on Friday, investors in Asia diversified into other currencies, pushing the dollar index to a fresh four-month low on hopes the worst of the economic slump may be over.
But caution ahead of results from banking giant HSBC took the shine off the positive sentiment across financial markets and supported the dollar.
"We had a big squeeze up during Friday and into this morning, especially in terms of euro/dollar which went up towards the $1.37 resistance," said Rabobank strategist Jeremy Stretch.
"But while we have seen some caution this morning that's capped the dollar's slide, the direction in the short-term is still going to be determined by equity markets sentiment and global recovery prospects."
European shares fell in early trade and U.S. stock futures pointed to a lower start for Wall Street later in the day.
Nonetheless, analysts said with several risk events out of the way, such as stress tests for U.S. banks and the jobs numbers, investors seemed more confident, although there was little in the way of near-term events to keep up that momentum.
The ICE futures U.S. dollar index, which tracks the dollar versus a basket of six major currencies, dipped to 82.292, its lowest since early January after crashing through support from its 200-day moving average on Friday.
The dollar index later trimmed its losses to stand at 82.423, up 0.2 percent on the day.
The euro hit a seven-week high at $1.3670 on trading platform EBS at one point but later reversed course to stand at $1.3607, 0.3 percent down from late U.S. trade on Friday.
The euro had climbed 1.7 percent on Friday, helped by a break through its 200-day moving average, a key technical resistance on the charts.
"There seems to be a sea-change at work in terms of general sentiment," said Sue Trinh, senior currency strategist at RBC Capital Markets in Sydney.
"It will be an interesting week to see how sustainable that is because there's nothing really in terms of event risk."
The euro dipped 0.1 percent to 134.05 yen after briefly hitting a one-month high at 134.81 earlier. The dollar was 0.1 percent lower at 98.49 yen.
The New Zealand dollar climbed to its highest in six months above $0.6100 and the Australian dollar briefly struck a fresh seven-month peak in early Asian trade at $0.7714 before slipping to $0.7658.
Both have gained steeply against the yen this year as currencies seen benefiting once economic activity picks up, particularly in China. (Additional reporting by Charlotte Cooper in Tokyo, editing by Mike Peacock)