FOREX-Dollar slips as risk appetite rises on Fed, BoJ moves

* Dollar index hits 6-week low after FOMC

* Risk assets rally, putting pressure on dollar

* Canadian dollar hits 20-month high vs U.S. dollar (Adds quotes, U.S. data, updates prices, changes byline, dateline; previous LONDON)

By Gertrude Chavez-Dreyfuss

NEW YORK, March 17 (Reuters) - The dollar fell against most major currencies on Wednesday, still reeling from the U.S. Federal Reserve's continued commitment to keep interest rates low for an "extended period", while the yen slipped after the Bank of Japan eased policy.

The moves by the U.S. and Japanese central banks supported risk assets. U.S. stock futures were higher and Tokyo's Nikkei share average rose to an 8-week closing high. European shares <.FTEU3> followed suit, with the FTSEurofirst 300 hitting its highest in two months.

A rise in oil prices boosted commodity-linked currencies including the Canadian dollar , which rallied to a 20-month high versus its U.S. counterpart. Higher-yielding currencies such as the Australian and New Zealand dollars also rose.

"The dollar is on the defensive as a result of a carry-over from yesterday's Fed announcement to keep rates very accommodative for an extended period," said Omer Esiner, senior market analyst at Travelex Global Business Payments in Washington.

"Risk assets in general have also rallied. So I think what we're seeing here is a pledge by global central banks to maintain an accommodative policy, which will continue to favor higher-yielding assets at the expense of the safe-haven dollar and the yen."

In early New York trading, the ICE Futures' dollar index <.DXY>, which tracks the performance of the greenback versus a basket of six major currencies, was down 0.1 percent on the day at 79.682, having slipped to a six-week low of 79.520 in early European trade.

Data showing a bigger-than-expected fall in U.S. producer prices in February, which was caused mainly by lower energy costs, did little to harm risk appetite for higher-yielding currencies versus the dollar. For the data, see [ID:nN16104221].

"As long as the risk trade remains upbeat, which is the case globally if you look at stock markets overnight, the dollar will trade a bit weaker and the yen crosses will be bid," said Jacob Oubina, senior currency strategist at Forex.com in Bedminster, New Jersey.

The euro was little changed at $1.3760 , having hit a five-week high of $1.3817, according to Reuters data, buoyed by easing sovereign risk concerns after Standard and Poor's removed Greece's ratings from a downgrade review.

The dollar was up 0.3 percent at 90.52 yen against a broadly weaker Japanese currency.

The BoJ's decision to double the funds available to banks for three-month loans at the policy rate was widely flagged. However, it left the duration of fixed-rate loans unchanged at three months and two of its seven board members dissented.

BoJ Governor Masaaki Shirakawa said the liquidity operation was not aimed at affecting exchange rates. Some in the market speculate Japanese authorities want to stem yen strength.

Sterling jumped to $1.5382, its strongest against the dollar in nearly three weeks after the number of Britons claiming unemployment benefit in February fell. [ID:nONS004866]

Minutes from the Bank of England's policy meeting earlier this month showed board members voted unanimously not to extend quantitative easing, which also boosted the pound.

Against the Canadian dollar, the U.S. unit fell as low as C$1.0107 , its weakest since July 2008, as the Canadian currency extended gains on the back of higher oil prices and a recent batch of strong economic data.

(Additional reporting by Tamawa Desai in London and Steven C. Johnson; Editing by Chizu Nomiyama)