* Dollar falls, but moves lack conviction
* Focus is on next week's Fed meeting, Treasury auction
* Aussie, Kiwi outperform as equities, oil prices climb (Updates prices, adds comment)
By Gertrude Chavez-Dreyfuss
NEW YORK, June 19 (Reuters) - The dollar fell on Friday, while higher-yielding currencies such as the Australian dollar rose, as more upbeat U.S. data and gains in equities boosted hopes that the global economy was reaching a bottom.
That has made investors comfortable buying riskier assets such as stocks and commodities, and the currencies tied to them, as they pared back holdings of the safe-haven U.S. dollar.
Declines in the dollar against the euro were limited, however, with investors wary ahead of a Federal Reserve policy meeting and the issuance of another record batch of U.S. government debt.
"There's a bit of risk appetite with the S&P 500 bouncing off its 200-day moving average yesterday, and this has carried over to today," said Shaun Osborne, chief currency strategist at TD Securities in Toronto. "That's good news for the Aussie, Kiwi (New Zealand dollar), and Canada but bad news for the yen and U.S. dollar."
The positive outlook stemmed from Thursday's government data showing the number of people on U.S. jobless benefits fell for the first time since January, and manufacturing in the U.S. Mid-Atlantic region shrank much less than expected in June.
In midday New York trading, the euro was up 0.5 percent against the dollar at $1.3965.
The euro has lost momentum, though, against the dollar above $1.40. Analysts said the euro is still beset with Europe's financial and fiscal situation given disclosure from the European Central Bank this week that European banks may face another $283 billion in losses by the end of next year.
TD's Osborne also cited an option structure in the euro/dollar pair that should keep it confined within narrow ranges for some time, at least between $1.38 and $1.40.
The dollar fell 0.3 percent against the yen to 96.27 yen, while the euro was little changed at 134.45 yen.
AUSSIE OUTPERFORMS
The Australian dollar outperformed other majors, gaining 0.8 percent to 77.90 yen and 1.2 percent against its U.S. counterpart to US$0.8089.
Adding to recent optimism, International Monetary Fund First Deputy Managing Director John Lipsky on Friday pointed to signs the decline in global output has moderated and said the IMF is likely to revise up its 2010 economic growth forecasts.
This helped push European shares and oil prices higher, bolstering commodity currencies such as the New Zealand dollar, which rose 1.2 percent versus the greenback to US$0.6450.
Falls in the yen and dollar were limited, however, with investors unconvinced the recent rally in riskier assets was unjustified as the global economy is still struggling to emerge from its worst recession in decades.
Another record round of U.S. Treasury auctions -- some $104 billion of debt will be offered next week -- will be closely followed for signs of how investor demand is holding up in the face of an avalanche of new government paper.
"That is a serious amount of supply for the Street to absorb and it is not unreasonable to see prices fall and yields back up in advance of such actions," said HSBC in a research note.
"We continue to think that over time, the big increase in the supply of dollars via increased Treasury issuance will create headwinds for the U.S. dollar."
In the coming week, markets will watch whether the Fed addresses a recent rise in short- and long-term interest rates, either by emphasizing it will keep benchmark rates low or by saying it will extend its purchase of U.S. Treasuries. An aggressive expansion of its buying is seen as unlikely.
The Fed begins its two-day monetary policy meeting on Tuesday, with a decision and statement expected on Wednesday.