* Dollar falls as risk appetite boosted by higher stocks
* Euro up 0.4 percent at $1.4043
* Wary of SNB intervention, Swiss KOF index eyed
* NZ economy shrinks in Q1 for 5th straight qtr, dents kiwi
By Tamawa Desai (Adds quotes, updates prices, changes dateline pvs TOKYO)
LONDON, June 26 (Reuters) - The dollar fell against a basket of currencies on Friday as risk sentiment was supported by higher equities and firmer commodity prices.
"Risk sentiment is back in full force," said Christian Lawrence, currency strategist at RBC Capital Markets. "The dollar is being sold across the board."
The exception was the New Zealand dollar which fell following data showing the New Zealand economy shrank for the fifth quarter in a row, its longest recession on record.
The dollar index, a gauge of the greenback's performance against six other major currencies, fell 0.4 percent to 80.063, towards a two-week low of 79.562 earlier this week.
By 0745 GMT, the euro rose 0.4 percent to $1.4043. It hit a two-week high of $1.4139 earlier this week.
Investors shifted back into riskier assets after the U.S. Federal Reserve indicated on Wednesday it would keep interest rates low for a while, leaving them unchanged near zero.
European share prices opened higher, following gains in Asia and on Wall Street the previous day.
On Thursday, the Fed extended some of its emergency funding facilities and its currency swap lines with central banks around the world to provide ample U.S. dollar funds.
"The market is just relieved to see the Fed is not in that much of a hurry to take (tightening) action," said Takahide Nagasaki, chief FX strategist at Daiwa Securities SMBC.
"Almost every market is back to where it was about a week ago before the Fed, in the same way as oil prices are rebounding above $70 a barrel," Nagasaki said.
SNB WATCH
Traders remained cautious about more currency intervention by the Swiss National Bank to weaken its domestic currency against the euro and the dollar to protect the export-driven economy.
"The slight improvement will do little to change the SNB's near-term outlook on monetary policy and we expect intervention to continue, even though the central bank is refusing to confirm or comment on the matter," said analysts at UBS in a note.
The euro remained above 1.53 Swiss francs, while the dollar hovered slightly under 1.1 francs.
The yen also fell broadly as investors sought higher-yielding currencies and on expectations for more capital outflows from Japan.
The dollar was flat against the yen at 95.85 yen. The euro climbed 0.3 percent to 134.66 yen.
Japanese consumer prices fell at a record pace in the year to May, down 1.1 percent from the same period a year ago.
The New Zealand dollar fell after news that the country's economy contracted by one percent in January-March. The kiwi was down 0.4 percent at $0.6428, and down 0.4 percent at 61.61 yen. (Additional reporting by Satomi Noguchi in Tokyo, editing by Mike Peacock)