* Euro firmer after upside surprise in German, French GDP
* Fed's more upbeat outlook helping spur risk appetite
* Higher-yielders like Aussie, kiwi benefiting
(Recasts, updates prices, changes dateline previous TOKYO)
By Ian Chua
LONDON, Aug 13 (Reuters) - The euro rose against the dollar and yen on Thursday after the euro zone's two biggest economies posted surprise returns to growth in the second quarter, but the dollar sagged to a one-week low against a basket of major currencies.
The dollar came under pressure as investors moved to riskier assets including commodities and higher-yielding currencies such as the Australian dollar after the Federal Reserve on Wednesday gave its clearest statement to date that it saw the U.S. recession nearing an end.
As expected, the Fed kept its benchmark rate unchanged near zero and said it would very likely stay there for an extended period to guide the way to recovery.
Data earlier showed both German and French gross domestic product rose 0.3 percent in the second quarter from the previous quarter, although both posted negative GDP growth year-on-year.
"Still, it's better than expected and that supports the euro a little bit," said Antje Praefcke, currency strategist at Commerzbank in Franfurt.
"But overall, it's still the effect of post-Fed trading with stocks being a little more on the positive side."
The euro rose 0.4 percent on the day to $1.4251 and was up 0.5 percent against the yen at 137.09.
The dollar edged up 0.2 percent against the Japanese unit to 96.20 yen but was down 0.2 percent against a basket of major currencies. The dollar index earlier fell to a session low of 78.536 -- a level last seen on Aug. 7.
Traders said the U.S. currency's upside against the yen seemed to be capped due to talk of Japanese investors repatriating funds related to $27 billion in coupon payments on U.S. Treasuries due on Aug. 15. In addition, $61 billion in coupon securities mature on the same day.
Higher-yielding currencies such as the Australian and New Zealand dollars extended gains made the previous day after rebounding from steep losses.
The Aussie was up 0.9 percent at $0.8394, having fallen as low as $0.8180 on Wednesday, while the kiwi advanced 0.8 percent to $0.6754.
Global stocks rose 0.6 percent with the FTSEurofirst 300 index of top European shares up 0.4 percent in early trade.
UNDERLYING CAUTION
While sentiment towards riskier assets has improved, there was still a degree of caution on the Fed's move to extend the time frame of asset purchases as it indicated the economy was still vulnerable, analysts said.
The Bank of England struck a dovish note on Wednesday, saying it might consider cutting the rate it pays on bank reserves in a bid to encourage them to lend more funds. Last week it said it was pumping in an additional 50 billion pounds by buying assets with newly created money.
In contrast, Norway's central bank held rates at a record low but opened the door for increased borrowing costs sooner than expected as the economy continued to recover.
With the Fed meeting over, investors are now looking to economic data for fresh trading cues.
The euro zone's flash gross domestic product for the second quarter is due 0900 GMT, followed by U.S. retail sales for July and weekly U.S. jobless claims at 1230 GMT.
U.S. retail sales are expected to rise 0.7 percent in July from June, following a 0.6 percent gain previously. See.
"The problem with Fed statement is that the market can read into it what it wants, leaving both sides content ... hence, for now it is still unclear which way the USD will jump," said Stuart Bennett, senior FX strategist at Calyon in London.
"A clue should come this afternoon with the release of July retail sales ... If the market decides to buy the USD on the back of the more upbeat headline, we could see a similar USD rally as after last Friday's employment report."
The majority of dealers surveyed by Reuters said the U.S. recession will end this quarter but they do not expect the Fed to raise rates until 2010 at the earliest, with four banks seeing a hike in the first half and seven in the second half. (Additional reporting by Kaori Kaneko in TOKYO; editing by Chris Pizzey)