* Dollar hits 2-mth low vs currency basket, euro
* Dovish Fed minutes increase U.S. growth worries
* Focus on U.S. data, JPMorgan earnings later in the day
By Jessica Mortimer
LONDON, July 15 (Reuters) - The dollar fell to a two-month low against the euro and a basket of currencies on Thursday after dovish U.S. Federal Reserve minutes heightened concerns about the outlook for the U.S. economy.
Fed officials last month felt they should be ready to consider additional steps to boost the U.S. economy if an already softening outlook took a noticeable turn for the worse. [ID:nN14148574]
"The Fed minutes were particularly dovish, with the discussion about the possibility of easing measures providing a soft underbelly for the dollar," said Chris Turner, currency strategist at ING.
The Fed also trimmed forecasts for growth this year. A string of U.S. data is due out on Thursday, including industrial output and weekly jobless claims [ECI/US] and any weakness could trigger more dollar selling, analysts said.
The minutes showed about half of U.S. policymakers saw growth risks to the downside, with some worried about the prospect of a deflationary spiral.
At 0956 GMT, the euro was up 0.4 percent to $1.2786 EUR=. It earlier hit a two-month high around $1.2803 when it broke just above an options barrier at $1.2800, traders said.
JPMorgan earnings, due later in the day, were also in focus, with analysts saying a solid report could boost risk appetite and lift equity markets, helping the euro and perceived higher-risk currencies.
Euro sentiment was boosted by Spain selling nearly 3 billion euros of bonds in an auction which traders said met with solid demand, providing reassurance about the debt-laden country's ability to raise cash. [ID:nLDE66D1KU]
The dollar index .DXY was down 0.4 percent at 83.081, having hit a two-month low of 83.004.
The index fell through support at around 83.15, a 38.2 percent retracement of its rise from a low of 74.17 in November 2009 to a high of 88.59 on June 8.
"U.S. data will be a very important market-moving factor today, especially after the minutes from the Federal Reserve's last meeting fanned speculation of further policy easing," said Hideki Hayashi, global economist at Mizuho Securities in Tokyo.
The dollar also hit a one-week low against the yen JPY= around 87.86 yen.
Traders said charts looked bearish after the greenback failed the previous day to rise above 89.23 yen -- a 38.2 percent Fibonacci retracement of the dollar's fall from its June high just below 93 yen to a July 1 low of 86.96 yen.
(Additional reporting by Rika Otsuka in Tokyo)