* Euro, sterling rise vs dollar along with risk appetite
* Commodity-linked currencies surge
* Investors await $11 bln 30-yr Treasury bond sale
* Talk of deficit, diversification weighs on dollar (Updates, adds comment, detail)
By Steven C. Johnson
NEW YORK, June 11 (Reuters) - The dollar fell on Thursday as improved U.S. unemployment and retail sales data boosted hopes of an economic recovery and reduced safe-haven demand for the greenback.
The euro hit a session high above $1.41 and the price of oil climbed further to well above $72 a barrel, lifting commodity-linked currencies such as the Australian dollar.
Data showing fewer Americans filed for first-time jobless benefits last week boosted hopes of recovery. U.S. retail sales also rose in May, though traders said the data was misleading because much of the gain was tied to higher gasoline prices.
"What we are seeing is a continuation of rising risk appetite. Equities are having a decent day, commodities are doing quite well, and that's weighing on the dollar," said George Davis, a strategist at RBC Capital Markets in Toronto.
A G8 source told Reuters the International Monetary Fund had raised global growth estimates for 2010 to 2.4 percent, from 1.9 percent in April.
The euro was last trading at $1.4084, up 0.9 percent and near a session peak of $1.4112. Davis said the next barrier comes in around $1.4128, giving it more room to rise.
The dollar fell 0.3 percent to 97.85 yen. A poll showing rising UK inflation expectations pushed sterling up 1.2 percent to $1.6540. The euro fell to 84.99 pence, its lowest level against the pound this year.
The Australian dollar rose 2.1 percent to $0.8182 and the New Zealand dollar soared 2.4 percent to $0.6448 after the central bank left interest rates unchanged.
The dollar was also dented by concern about a record U.S. budget deficit and a steady rise in long-dated U.S. government bond yields that could make it more costly to finance.
On Wednesday, yields on the benchmark 10-year Treasury hit 4 percent, and traders said a sale of $11 billion in 30-year bonds this afternoon was important.
The U.S. Treasury intends to issue some $2 trillion of fresh debt in 2009 alone, and while demand for short-dated debt has remained sturdy of late, analysts say foreign investors worried about higher deficits and inflation may shy away from tying up their money for 10 to 30 years.
"That adds a bit of risk to the market today, and with the dollar on the ropes already, it could fall further if the auction doesn't go well," Davis said.
Russia's central bank said this week it would divert some of its reserves away from U.S. Treasuries, a move that may be highlighted when the world's largest emerging countries meet in Moscow next week.
"It is quite obvious that people are worried about the U.S. fiscal deficit. The amount of capital being demanded by the U.S. Treasury for its funding programs is huge," Bank of New York Mellon currency strategist Neil Mellor said.