* Dollar index touches 1-week high
* Moves in major currencies modest
* ECB continues to sound dovish, may weigh on euro (Updates prices, adds comments)
By Masayuki Kitano and Ian Chua
SINGAPORE/SYDNEY, July 7 (Reuters) - The dollar edged higher on Monday and touched its highest level in more than a week versus a basket of major currencies, staying on firm footing in the wake of last week's solid U.S. jobs data.
The dollar index rose 0.2 percent to 80.340. It touched a high of 80.351 earlier on Monday, its highest level since June 26.
The greenback held steady versus the yen near 102.14 yen , after having risen 0.7 percent last week.
"It wouldn't be surprising to see a rise toward 102.50 yen," said Bart Wakabayashi, head of foreign exchange for State Street Global Markets in Tokyo, referring to the near-term outlook for the dollar against the yen.
"But if you ask whether we will see a new trend, that probably won't be the case," he added.
While there is focus on when the U.S. Federal Reserve's eventual interest rate hike cycle may start, Fed policymakers will probably err on the side of caution and refrain from raising rates earlier than the market expects, Wakabayashi said.
Last week's solid U.S. jobs data prompted traders to slightly increase bets that the Fed will lift rates in June next year. Several economists toyed with the idea of bringing forward their forecasts for a Fed rate hike, although most held firm.
The euro eased 0.1 percent to about $1.3585, having pulled back from a high of $1.3701 on July 1, its highest level in about six weeks.
The single currency could stay under pressure after a top European Central Bank official underscored the need for interest rates to remain low for longer.
ECB policymaker Benoit Coeure, while urging euro zone governments to do their part to boost growth, said rates must stay very low for a long time to ensure monetary stability.
"One should expect a divergence of monetary conditions between the euro zone and the United States and Britain - where interest rates will at some point be lifted," he said on Sunday.
Against the yen, the common currency was at 138.75 , down from last week's peak of 139.30.
Sterling remained a market darling and stayed within easy reach of last week's six-year high of $1.7180. The Canadian dollar, also in favour at the moment, stood at C$1.0666 per USD, just off a six-month high of C$1.0620 on Thursday.
The Australian dollar, in contrast, was still smarting from Reserve Bank of Australia Governor Glenn Stevens' remarks about it being overvalued.
The Aussie, nursing a 0.7 percent loss last week, eased 0.1 percent to $0.9356. Immediate support is seen at $0.9323, the 61.8 percent retracement level of its May 29-July 1 rally.
Investors in Asia looking for fresh inspiration will probably have to wait a little longer, given a dearth of major economic data due in the region.
In Europe, German industrial production figures and a euro zone sentiment report are due later in the day.
Key events this week include Chinese inflation data and minutes of the Federal Reserve's last policy meeting on Wednesday, the Bank of England's rate review on Thursday, and profit results and outlooks from major U.S. companies. The second quarter U.S. earnings season gets under way this week. (Editing by Richard Borsuk)