* Dollar index hits 2-week low, risk appetite picks up
* Euro hits two week-high; Aussie, Canadian dollars gain
* New York state factory activity improves
* Stocks boosted after strong Goldman, Intel earnings
* Eyes on U.S. industrial output data (Updates prices, adds comment, U.S. data, changes byline, dateline, previous LONDON)
By Steven C. Johnson
NEW YORK, July 15 (Reuters) - The dollar fell on Wednesday, hitting a two-week low against a basket of major currencies, as blockbuster results from Intel and Goldman Sachs boosted confidence about corporate earnings and the U.S. economy.
Data showing the slumping factory sector in New York state nearly pulled out of contraction in July and a report showing only a slight rise in U.S. consumer prices also eased concern about the economy, drying up safe-haven demand for the dollar and pushing investors into higher-yielding currencies and equities.
The low-yielding yen struggled while the euro was boosted by European shares and brushed off a slight annual decline in euro zone inflation.
"Intel's earnings got things kicked off yesterday, and the U.S. data just improves the outlook, so all lights are flashing green for investors to take on risk," said Brian Dolan, chief currency strategist at Forex.com in Bedminster, New Jersey.
The euro was up 0.8 percent at $1.4088, near the day's high around $1.4098, the highest since July 2. It rose 0.8 percent to 131.70 yen while the dollar was down 0.1 percent at 93.50 yen.
Reaction was muted to the Bank of Japan's expected move to extend corporate finance support measures by three months.
Sterling rose 0.7 percent to $1.6431 while an index that measures the dollar against six major currencies slipped to a two-week low.
The Australian and Canadian dollars, which tend to do well when investors' taste for risk grows, each rose about 1 percent against the greenback, with the Canadian currency hitting a fresh one-month high.
Analysts said risk appetite was rising on speculation other U.S. firms may post solid second-quarter performance after reports from the two U.S. powerhouse firms exceeded forecasts.
"The market may be expecting more pleasant surprises rather than unpleasant surprises from earnings," said Steve Barrow, head of G10 currency research at Standard Bank in London.
JPMorgan Chase & Co will announce its results on Thursday, followed by Bank of America Corp and Citigroup Inc on Friday. (Additional reporting by Tamawa Desai in London; Editing by James Dalgleish)