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* Dollar mostly flat against euro, yen
* Focus on euro zone inflation data
* Emerging market currencies gain against dollar
By Sam Forgione
NEW YORK, Feb 24 (Reuters) - The dollar edged lower against a basket of major currencies on Monday as investors' risk appetite improved amid expectations that Ukraine would receive international aid, calming fears surrounding the heavily indebted country.
The dollar index was down slightly at 80.218 after posting its first weekly gain in three weeks. Expectations that Ukraine would receive aid from Western donors helped stoke investors' risk appetite.
The greenback also fell sharply against the so-called commodity currencies - the Australian, Canadian and New Zealand dollars.
"Ukraine is a contributor" to the dollar's weakness, said Steven Englander, global head of G10 foreign exchange strategy at Citigroup Global Markets Inc. in New York.
Investors demonstrated their risk appetite by buying U.S. stocks as well. The benchmark Standard & Poor's 500 stock index climbed to an all-time high earlier on Monday, and was last trading up 0.62 percent.
The S&P 500 being up on Monday was "one of the indications that markets are in a positive mood, and this year that has been a signal for dollar selling," Englander said.
Despite its broader losses, expectations that U.S. economic data would rebound in the weeks ahead should support the dollar against the euro and yen in upcoming sessions, analysts said. The expectations come after negative surprises on U.S. hiring, retail sales and housing during the past few weeks.
"It's time for some stability in the U.S. data," said Thierry Albert Wizman, global interest rates and currencies strategist at Macquarie Limited in New York.
The latest U.S. data released on Monday showed some economic weakness. The Chicago Fed National Activity index fell to -0.39 in January from 0.16 in December, while financial data firm Markit's preliminary February reading on the services sector fell from 56.7 to 52.7.
The euro, meanwhile, was pressured against the dollar after a report heightened expectations of more monetary stimulus from the European Central Bank. The euro last traded mostly flat at $1.3734.
ECB Governing Council member Ignazio Visco told news agency Market News International that the ECB is ready to consider cutting its deposit rate into negative territory if needed.
Weak data out of China, meanwhile, limited the yen's gains against the dollar. The rise in home prices in China eased for the first time in 14 months in January, data showed, raising fresh concerns over the health of an economy that has been a key driver of global growth in recent years.
The dollar last traded little changed against the yen at 102.44.
The greater appetite for risk supported emerging market currencies, which gained against the dollar. The dollar was down 0.3 percent versus Brazil's real, while the dollar fell 0.32 percent against the Mexican peso to trade at 13.22.
"People who were short these currencies want to trim their shorts," said Alan Ruskin, global head of G10 currency strategy at Deutsche Bank in New York. He said the greater risk appetite evident in the rise in U.S. stocks drove demand for emerging market currencies.
Marshall Gittler, head of global FX strategy at IronFX Global, pointed to euro zone inflation data for February on Friday as a focus for investors this week.
Group of 20 finance ministers and central bank chiefs agreed at a weekend meeting in Sydney to set a collective gross domestic product growth target of 2 percent over the next five years.
Global growth and recent turmoil in emerging markets were a focus of the meeting, but the G20 communique did not hint at significant friction between advanced and emerging economies.