* Dollar index down 0.2 percent at 80.114
* Concerns about US debt, reserve diversification dent dlr
* Aussie, NZ dlrs surge; Optimism on global econ continues
* US 30-yr Treasury bond auction, US retail sales awaited
(Adds quote, updates prices)
By Harpreet Bhal and Jessica Mortimer
LONDON, June 11 (Reuters) - The dollar fell broadly on Thursday, dented by concerns about rising levels of U.S. debt and the possibility central banks may diversify away from U.S. dollar assets.
Ongoing hopes the global economy is showing signs of recovery also boosted perceived higher risk currencies such as the Australian dollar, helped by a 0.7 percent rise in European shares and another sharp increase in oil prices.
Adding to the evidence of an economic recovery, a G8 source told Reuters on Thursday the International Monetary Fund has raised its global growth estimates for 2010 to 2.4 percent from April's forecast of 1.9 percent.
The gains in riskier assets came to the detriment of the dollar and the Japanese yen, while the dollar also came under pressure as a sharp rise in U.S. benchmark Treasury bond yields sparked renewed concerns over the parlous U.S. fiscal situation.
Market players were hesitant to take big positions, however, before gauging the reaction to a 30-year U.S. Treasury bond auction scheduled for later in the day. They were also awaiting U.S. retail sales and weekly jobless claims data at 1230 GMT.
"It is quite obvious that people are worried about the US fiscal deficit. The amount of capital being demanded by the US Treasury for its funding programmes is huge," Bank of New York Mellon currency strategist Neil Mellor said.
"For the longer term, there is fear about the dollar's long term status. Ultimately it is a long term view but you can't preclude it happening right now," he added.
Russia said on Wednesday it would divert some of its reserves from U.S. Treasuries to IMF bonds, a move that may be highlighted when the world's largest emerging countries meet next week.
The dollar index, a gauge of the greenback's performance against six other major currencies, fell 0.2 percent to 80.114 at 1156 GMT from late U.S. trade on Wednesday.
The euro rose 0.2 percent to $1.3992, resuming its rise towards a more than five-month high of $1.4339 touched last week before falling sharply near $1.38 earlier this week.
The euro was steady at 137.31 yen, while the dollar slipped 0.1 percent to 98.05 yen.
The Australian and New Zealand dollars led gains, storming ahead on the back of better-than-expected Australian employment data and a Reserve Bank of New Zealand decision to leave interest rates unchanged.
The Australian dollar jumped 1.4 percent against its U.S. counterpart to $0.8130, while the New Zealand unit soared 1.7 percent to $0.6404.
RISING U.S. YIELDS
On Wednesday, yields on U.S. Treasuries briefly broke above 4.0 percent following a government bond auction.
Rising U.S. bond yields have so far boosted the dollar on the basis that it reflected improving U.S. economic conditions.
However, the market remains cautious that bond yields could start rising sharply on concern about the U.S. fiscal situation, given its ballooning debt.
"The concern over the scale of supply coming to the U.S. debt market has been exacerbated by the moves of some major central banks to diversify out of U.S. fixed income investments," said Derek Halpenny, European head of global currency research at Bank of Toyko-Mitsubishi UFJ in London.
Markets were stirred after Russia's plan to cut U.S. Treasury purchases and buy IMF-backed bonds on Wednesday. China has also said it would purchase IMF-backed bonds.
Brazil, Russia, India and China are set to meet in Moscow on June 16, and markets expect further talk about diversification of reserves away from the U.S. dollar.
Meanwhile, the growing belief that the global economy is finally on the mend was given further credence after data showing a surge in Chinese investment in May. (Reporting by Harpreet Bhal and Jessica Mortimer; additional reporting by Tamawa Desai in London; editing by Chris Pizzey)