(Refiles to add dropped word 'up' in second paragraph)
* Russia stresses need for new reserve currency
* Euro climbs after surprisingly strong ZEW survey
* Markets focus on BRIC summit after Russia comments
* U.S. data shows higher housing starts, muted inflation (Recasts, adds comments, details, updates prices, changes byline, dateline; previous LONDON)
By Gertrude Chavez-Dreyfuss
NEW YORK, June 16 (Reuters) - The dollar fell across the board on Tuesday, pressured by comments from Russia suggesting a need for a global reserve currency other than the greenback.
Data showing a rebound in U.S. housing starts and an unexpectedly small rise in producer prices also weighed, reducing safe-haven demand for dollars, and investors snapped up higher-yielding currencies such as the Australian dollar.
But Russia's dollar-negative comments dominated the market, a day after the country's finance minister backed the greenback as the world's reserve currency.
"The dollar is a little bit lower and it's a reaction to comments from Russian President Medvedev," said Omer Esiner, senior currency analyst at Travelex Global Business Payments in Washington.
"Clearly the largest holders of U.S. Treasuries are increasingly nervous about the fiscal stability of the U.S. going forward. That said, I don't think it's to anybody's interest to see a run on the dollar."
In early New York trading, the euro traded 0.7 percent higher at $1.3878 on electronic trading platform EBS, after climbing as high as $1.3934 following the housing data.
The euro had gained after German think tank ZEW said its economic sentiment index surged to 44.8 in June from 31.1 in May, exceeding expectations for a 35.0 print and suggesting market optimism for a recovery this year.
"Risk is back on the table today ... The recovery risk appetite layered atop the improvement in the ZEW has provided the fuel to get (euro/dollar) above $1.39," said Jeremy Stretch, strategist at Rabobank in London.
The dollar fell 1 percent against the yen to 96.86.
With the data out of the way, traders focused on Tuesday's summit of Brazil, Russia, India and China (BRIC) in Russia, amid rising market speculation they may be looking to diversify reserve portfolios which contain hefty amounts of U.S. assets.
The first summit of the world's biggest emerging economies will confront the failures of the global financial system and could discuss ways to reduce the dominance of the U.S. dollar.
The BRIC leaders are seeking to use their economic clout to get a bigger say in how the world's financial system is run.
"The existing set of reserve currencies, including the U.S. dollar, have failed to perform their functions," President Dmitry Medvedev told a news conference in the Russian city of Yekaterinburg ahead of the BRIC summit.
"We will not do without additional reserve currencies," he said, adding that a new supranational reserve currency was also an option as IMF Special Drawing Rights gained a bigger role.
Russian Finance Minister Alexei Kudrin at the weekend had said the dollar's status as the world's main reserve currency was unlikely to change in the near term, clouding the market's understanding of Moscow's position. (Additional reporting by Naomi Tajitsu in London; Editing by James Dalgleish)