FOREX-Dlr hits '09 low as data boosts risk appetite

FOREX-Dlr hits '09 low as data boosts risk appetite

* Dollar hits lowest level of the year vs currency basket

* Global stocks rally after U.S., other factory data

* Euro trades more than 1 percent higher

* Sterling, Aussie, kiwi, CAD hit multimonth highs (Adds comments, details. Updates prices)

By Vivianne Rodrigues

NEW YORK, Aug 3 (Reuters) - The dollar hit its lowest level in 2009 against a basket of currencies on Monday on encouraging manufacturing reports from China, Europe and the United States, triggering a rally in stocks and boosting risk appetite.

In addition to the factory data, solid earnings from European banks HSBC Holdings PLC and Barclays PLC helped the euro to rise more than 1 percent and gave a boost to higher yield currencies.

A key measure of U.S. manufacturing shrank in July but at a slower pace than in June. Stocks on Wall Street rose after a rebound in sales by Ford Motor Co (F.N).

"The improvement in U.S. economic data should further boost risk-seeking and weigh on the dollar," said Brian Kim, a currency strategist at UBS AG, in Stamford, Connecticut.

The euro EUR= hit its highest level this year at $1.4427 and was last at $1.4417, up 1.2 percent on the day, according to Reuters data. Meanwhile, sterling and the Australian and New Zealand dollars hit their highest since autumn.

"The forex market may build momentum to keep pushing euro/dollar above the 1.44 level, especially if data remain supportive," said Matthew Strauss, a senior currency strategist at RBC Capital Markets in Toronto. "We are seeing broad dollar weakness as commodity and other higher yielding currencies jump."

The dollar index .DXY, a gauge of the U.S. currency's performance against six other major currencies, fell to as low as 77.524, its lowest in about 10 months. A rally in oil prices to above $71 per barrel contributed to the drop in the index, traders said.

Also helping to batter the U.S. currency was a jump in European shares .FTEU3 to their highest since November as HSBC (HSBA.L) reported that profits halved from a year ago, but were still ahead of forecasts [nL3677299].

HSBC's announcement followed Barclays report of an 8 percent rise in half-year profit, though bad debts at the bank almost doubled.