* Dollar drops after stronger data erodes safe-haven demand
* Philly Fed factory slump eases sharply in June
* Euro/Swiss franc rises on talk of intervention
* BIS, SNB decline comment on the rise in euro/Swiss (Updates prices, adds comment, changes byline)
By Wanfeng Zhou
NEW YORK, June 18 (Reuters) - The U.S. dollar fell against the euro and higher-yielding currencies on Thursday after a report showing improving regional business conditions dented safe-haven demand for the greenback.
Action in the euro was particularly heavy, with the single European currency jumping versus the Swiss franc amid speculation the Bank for International Settlements was buying euros on behalf of the Swiss National Bank to defend the 1.50-franc level.
Demand for the dollar fell after the Philadelphia Federal Reserve Bank said on Thursday its business activity index for the U.S. Mid-Atlantic region rose sharply to minus 2.2 in June from minus 22.6 in May. That was the highest since September 2008 and well above economists' expectations of minus 17.
"The dollar is overall somewhat on the defensive after the Philly Fed report," said Vassili Serebriakov, currency strategist at Wells Fargo in New York. "The improvement was quite notable across the board in the release."
"It's probably good for risk appetite and good for commodity currencies," he added.
In early afternoon trading in New York, the euro was up 0.2 percent against the dollar to $1.3969 after rising as high as $1.4002.
The dollar rose 0.8 percent against the yen to 96.46 extending gains in afternoon trading as a rise in U.S. stocks put pressure on the yen, another safe-haven currency.
Higher-yielding, commodity currencies advanced, with the Australian dollar up 1.5 percent at US$0.8044 and the New Zealand dollar 1.8 percent higher at US$0.6434.
Further evidence that the recession is fading came from the Conference Board's forward-looking measure of the U.S. economy for May, which posted its biggest increase in five years. Separate government data showing a decline in continued jobless claims added to improved risk appetite.
SWISS FRANC IN FOCUS
The euro surged to 1.5149 francs on electronic trading platform EBS from 1.5008. It was last at 1.5135 francs, up 0.5 percent on the day.
Several traders in the United States and London said they saw bids from the BIS in the currency market for the euro and offers to sell the Swiss franc. The BIS and SNB both declined to comment.
"It looks like the BIS have been in ... it's probably fair to say it's SNB-related," a London-based trader said.
The Swiss franc's move came after the SNB held interest rates at a record low on Thursday, keeping its target rate for three-month Swiss franc LIBOR at 0.00-0.75 percent with an aim to lower it to 0.25 percent.
SNB Governor Jean-Pierre Roth said he would continue to stop an irrational rise in the Swiss franc, but analysts said he did not confirm the SNB had acted beyond initial intervention after its last policy meeting on March 12 when the euro jumped to nearly 1.5350 francs from around 1.4750 francs.
Strategists at Danske Bank said if there were any doubts, the SNB has assured investors that it will continue to act to prevent a potential appreciation of the Swiss franc against the euro.
"We remain confident that the SNB will in fact be successful in securing a floor below EUR/CHF -- with 1.50 looking quite robust," they wrote in a note.
Markets were constantly on the alert for SNB action after the bank in March stunned the global foreign exchange market and bought euros and dollars versus the Swiss franc. Before that, the SNB had last physically intervened in August 1995.