* Dollar index down 0.2 pct at 80.79 <.DXY>
* German ZEW sentiment index higher than expected
* Euro pressured vs dlr on concerns about Greece
(Adds quotes, data, updates prices)
By Tamawa Desai
LONDON, April 20 (Reuters) - The dollar and yen eased on Tuesday as a sell-off in growth-linked currencies waned and risk-taking sentiment strengthened on expectations of global economic recovery.
The euro rose to session highs against the dollar <EUR=> after the German ZEW institute's April economic sentiment index came in above forecast. [ID:nDEP003302]
"The second quarter is shaping to be one of strong growth after the weak first quarter," said Uwe Angenendt, economist at BHF. ^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^
For a graphic of the ZEW index and German GDP, click
By 1033 GMT, the euro hovered near the day's high of $1.3522, up 0.2 percent on the day <EUR=>. Traders said gains accelerated after stop-losses were hit above $1.3510.
The euro also got a mild boost after strong investor demand at a 1.5 billion euro sale of Greek 13-week T-bills, which showed a bid-to-cover ratio of 4.6. [ID:nWLB2961]
The brighter euro zone data followed UK consumer price inflation, which came in at a higher-than-expected 3.4 percent year on year in March, compared with forecasts of 3.2 percent, and underpinned the pound <GBP=D4>.
The dollar index, a gauge of the greenback's value against a basket of currencies <.DXY>, was down 0.2 percent at 80.79 after pulling back from a high of 81.28 on Monday.
The yen came off Monday's one-month highs hit against the dollar as investor appetite for riskier assets was supported by positive U.S. earnings, which helped Wall Street rise and eased fears about the impact of the U.S. SEC's fraud case brought against Goldman Sachs <GS.N>.
The UK's financial watchdog said on Tuesday it would start a formal probe into Goldman.
The dollar rose 0.4 percent from late New York trade to 92.75 yen <JPY=>, up from a low of 91.58 yen on Monday.
The yen also fell on the crosses, falling 0.5 percent against the euro at 125.36 yen per euro <EURJPY=R> and 0.8 percent against the Australian dollar <AUDJPY=R>.
Analysts said any adverse effects on air travel and logistics from a volcanic ash cloud that had shut down European flights was also seen contained.
But traders remained wary of chasing up the euro on concerns about highly-indebted Greece.
The euro earlier fell after European Central Bank Governing Council member Axel Weber said Greece may require assistance of up to 80 billion euros to avoid default, according to a report in the Wall Street Journal on Tuesday. [ID:nLDE63J05P]
That amount would be far larger than the 30 billion euro aid mechanism agreed by euro zone finance ministers earlier this month.
"No one believed that initial amount would be enough to cover Greece's funding needs," said Lee Hardman, currency economist at Bank of Tokyo-Mitsubishi UFJ. "The short-term liquidity risk may be reduced, but that doesn't resolve the issue of debt sustainability. It's difficult to see a way out for Greece."
Sweden's central bank left interest rates unchanged as expected, and repeated it would begin tightening policy in summer or early autumn. [ID:nSAC016657]
The crown briefly dipped to around 9.6750 against the euro from 9.6525 beforehand <EURSEK=> but later headed higher. ^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^
For a graphic of Swedish rates and the crown, click
The Bank of Canada is expected to keep rates steady later in the day, but market participants expect a hawkish tilt to its assessment given the strength of its economy.
(Graphics by Scott Barber, editing by Nigel Stephenson)