FOREX-Aussie leads US dlr selloff; eyes on ECB, BoE

* Dollar slides, led by Aussie rally on jobs data

* Risk appetite picks up after upbeat Alcoa earnings

* Dollar/yen hovers above 8-month low of 88 yen

* Eyes on ECB, BoE meetings; euro hovering around $1.4750

(Adds comment and quotes, updates prices, changes byline and dateline. Previous: TOKYO)

By Jamie McGeever

LONDON, Oct 8 (Reuters) - The dollar weakened on Thursday after strong Australian jobs data sent the Australian dollar sharply higher and an upbeat U.S. corporate earnings report fuelled investor demand for higher risk and yield at the expense of the greenback.

Australian data beat expectations for a fall in jobs in September, with 40,600 positions created instead, pushing the Aussie to a 14-month high against the U.S. currency as markets anticipated more interest rate hikes to come. [ID:nSYD431125]

U.S. aluminium producer Alcoa Inc (AA.N) reported a surprise third quarter profit, which boosted overall bullishness about a global recovery. [ID:nN07320124] European stocks rose at the open and Wall Street futures pointed to a higher open too.

But European traders are unlikely to move currencies as much as their counterparts in Asia did, as they await the European Central Bank and Bank of England policy meetings later in the day.

"The Aussie data was way above expectations ... and certainly backs up what they did this week," said Derek Halpenny, currency economist at BTM-UFJ in London, refering to the Reserve Bank of Australia's rate hike earlier this week.

"Equity markets are up, and the general sentiment there is good after the Alcoa figures," he said, explaining that until U.S. interest rates and yields rise too, a backdrop of rising equities and risk appetite will be broadly dollar-negative.

At 0730 GMT the dollar index .DXY, a measure of the greenback against six major currencies, was down 0.7 percent on the day at 75.95, a two-week low and not far off its 2009 low set last month at 75.827.

ECB, BOE

The euro was up 0.7 percent against the greenback at $1.4775 EUR= and the dollar was down 0.4 percent against the yen at 88.35 yen JPY=.

Wednesday's eight-month low of 88.01 yen JPY= is the most immediate target, and a break below would bring January's 13-year low of 87.10 yen into view.

The biggest gainer was the Australian dollar, up 1.4 percent on the day to trade above $0.90 for the first time in 13 months AUD=.

On Tuesday, the RBA became the first central bank in the Group of 20 to raise its cash rate in this cycle. The move led to a general improvement in risk appetite and made leveraged carry trades even more attractive.

On the other hand, U.S. interest rates are set to remain anchored at record lows well into next year, making the dollar a possible funding currency for higher-yielding assets.

Attention shifts to European interest rates now, with the ECB and BoE meetings. Both central banks are expected to keep rates at record lows of 1 and 0.5 percent, respectively, so the focus is what they say about their broader policy.

ECB President Jean-Claude Trichet might caution investors against high hopes of a speedy economic recovery. [ID:nL7664834]. There is also speculation that he might complain about the euro's strength.

Sterling GBP=D4 climbed 0.2 percent to $1.5994 ahead of a Bank of England monetary policy committee meeting. Rates are expected to remain on hold, although markets will be keen to get some insight on its quantitative easing programme. [ID:nL7579384]

"The BoE, which has (rightly) welcomed sterling's slide, may resort to more guarded language as sterling is now the worst performing G10 currency, be it on a one-month or three-month horizon," Citigroup currency strategists said in a note on Thursday.

"On the other hand, the ECB has recently appeared more apprehensive of euro strength/dollar weakness, but is unlikely to deviate from language used in the G7 statement and its belief in the U.S. 'strong dollar' policy," they added.