FOREX-Dollar hits 7-week low; Chinese data buoys Australian dollar
* Dollar broadly weak as Fed policy uncertainty remains
* China data helps riskier currencies, especially Aussie
* Euro hits seven-week high versus dollar, helped by German data
* U.S. jobless claims rise in latest week
NEW YORK, Aug 8 (Reuters) - The dollar slumped to a seven-week low against a basket of currencies on Thursday as recent inconclusive economic data and comments from Federal Reserve policymakers raised doubts over when the U.S. central bank will begin reducing stimulus.
Riskier currencies and growth-linked currencies, such as the Australian dollar, notched gains versus the greenback on forecast-beating Chinese trade data, which could indicate the world's second-biggest economy was stabilizing after more than two years of slowing growth.
The dollar index, which measures the currency's value against six major currencies, fell 0.2 percent to 81.124, having hit 81.089, its lowest since mid-June. It has lost 4 percent since hitting a three-year high a month ago.
Although most analysts expect the dollar to resume gains towards the end of the year, uncertainty about when the Fed may reduce its $85 billion per month bong buying program should keep the currency under pressure.
Some Fed policymakers have suggested this week the central bank could scale back as soon as September, but this will depend on a further improvement in the jobs market.
"We expect that as the Fed moves towards tapering, with September our base case, and the dollar will retrace some of this lost ground and most currencies will weaken into year-end," said Camilla Sutton, chief currency strategist at Scotiabank in Toronto.
The euro was up 0.2 percent at $1.3362, having hit a seven-week high of $1.3375, helped by figures showing an above-forecast German trade surplus and by Wednesday's much stronger-than-expected German factory data.
"The recent strength in the euro is likely attributed to signs of stabilization in the fundamental data pointing to an improving outlook," Sutton said.
The European Central Bank, whose balance sheet is shrinking as well as ECB President Draghi's stable tone has induced a round of short covering in the euro, but relative monetary policy and growth will ultimately weigh on the euro and send it down to $1.25 by year-end, she said.
Meanwhile, the Australian dollar, which tends to benefit from upbeat Chinese data because China is the main destination for the country's raw materials exports, rose 0.9 percent to $0.9082.
"Risk appetite got a boost overnight from the China trade data," said Ioan Smith, Managing Director, Knight Capital Group Europe, adding that a drop in dollar/yen helped drive euro/dollar higher.
The dollar hit a seven-week low of 96.02 yen, maintaining its recent downward trend, and was last down 0.1 percent at 96.20 yen. The yen showed no immediate reaction after the Bank of Japan kept its policy on hold, as expected.
The dollar extended losses versus the yen after U.S. data showed the number of Americans filing new claims for jobless benefits rose slightly last week but was near its lowest level since before the 2007-09 recession, a hopeful sign for the U.S. economy.
Meanwhile, sterling rose 0.2 percent to $1.5514, near a seven-week peak of $1.5534 hit on Wednesday after "forward guidance" on monetary policy from the Bank of England prompted investors to bring forward expectations of when interest rates will rise.
The BoE said rates would not rise until unemployment fell to 7 percent, something it saw as unlikely for at least three years. But the market took the view an improving UK economy may see rates rise sooner than previously thought.