* Fed's Bullard reaffirms low interest rates view
* ECB's Trichet, Paramo talk about exit strategy
* Dollar rises from 6-week low vs yen; Aussie, kiwi gain
* U.S. existing home sales surge 10.1 pct in Oct. (Updates prices, adds comment, changes byline)
By Wanfeng Zhou
NEW YORK, Nov 23 (Reuters) - The dollar fell against a basket of currencies on Monday after comments from a Federal Reserve official reinforced expectations U.S. interest rates would stay low for some time.
A rally in stock markets and gains in gold and oil prices also dented safe-haven demand for the dollar and lifted commodity-linked currencies like the Canadian and New Zealand dollars.
St. Louis Federal Reserve President James Bullard on Sunday said the Fed should keep alive its mortgage-related assets purchase program beyond a planned end date to stimulate the economy. Investors saw the Fed keeping wider monetary policy accommodative for the foreseeable future. See [ID:nN22246631]
"Risk appetite is back ... with stocks up globally," said John Doyle, foreign-exchange strategist at Tempus Consulting in Washington. "Also weighing on the dollar was speculation that the Federal Reserve will keep stimulus measures in place for longer than many expect, ensuring that interest rates remain virtually zero," he added.
Low rates would limit returns on many U.S. investments, prompting investors to diversify out of the greenback and seek other riskier currencies and assets with higher yields.
In afternoon trading, the euro was up 0.7 percent at
$1.4969
Analysts said moves were exacerbated by thin liquidity with Tokyo markets shut and ahead of Thursday's U.S. Thanksgiving holiday.
The euro
An industry report showing U.S. existing home sales jumped to a more than 2-1/2-year high in October further spurred risk appetite and pressured the dollar. See [ID:nN23249040].
"The (housing) data adds to bearish U.S. dollar momentum, as stronger-than-expected home sales data is bullish for equity markets," said George Davis, chief technical strategist at RBC Capital Markets in Toronto.
ECB TO EXIT BEFORE FED?
In contrast to the Fed's stance, both the European Central Bank's president, Jean-Claude Trichet, and executive board member Jose Manuel Gonzalez Paramo discussed plans for the ECB to exit its quantitative easing strategy.
On Monday in Madrid, Trichet said as the situation becomes more normal, the focus in the medium term calls for a "gradual and timely phasing out of these measures." [ID:nGEE5AM1L9]
Paramo said on Sunday the ECB could detail plans for phasing out its quantitative easing at the December meeting. [ID:nGEE5AL04Z].
Their remarks have boosted the view the ECB is likely to exit its easing strategy ahead of the Fed, underpinning the euro against the dollar.
The euro was also supported after a survey showed the euro zone's service sector grew at its fastest pace in two years in November, suggesting an economic recovery will continue in the fourth quarter, albeit at a slower rate. [ID:nGEE5AM0RG]
The ICE Futures dollar index <.DXY>, which tracks the greenback against six major currencies, dropped 0.7 percent to 75.132, off a two-week high of 75.879 hit on Friday.
Gold hit record highs and oil rose, benefiting
commodity-linked currencies. The Australian dollar