FOREX-Dollar soars to 5-mth high vs euro as turnaround eyed

                                
 * Euro slumps to 5-month low vs dollar at $1.5195
                                
 * ECB cools rate hike prospects
                                
 * Dollar index hits 5-1/2-month high, analysts see
turnaround
                                
 * Pound hits 17-month low, kiwi plunges nearly 2 pct
                                
 By Shinichi Saoshiro
                                
 TOKYO, Aug 8 (Reuters) - The dollar surged across the board
on Friday, hitting a five-month high against the euro and a
17-month peak against the pound as the European Central Bank's
caution on the growth outlook reinforced worries of a faltering
global economy.
                                
 The dollar index vaulted to its highest in more than five
months, with investors and analysts saying the U.S. currency is
staging a broad rebound from record lows struck earlier in the
year as the global slowdown takes a toll on other major
currencies.
                                
 As investors rushed back to the greenback to cover short
positions, the Australian dollar also shed about 1 percent and
the New Zealand dollar lost 2 percent.
                                
 "We are seeing a shift away from a focus on the U.S. to a
more global problem," said Sharada Selvanathan, a currency
strategist at BNP Paribas in Hong Kong. "The dollar is getting a
boost by default."
                                
 The ECB left rates unchanged at 4.25 percent as expected on
Thursday, and while Trichet insisted inflation was still its
main concern, analysts said he had little choice but to do so
after a rate hike the previous month. [ID:nL7650401]
                                
 Instead, investors read Trichet's comments that growth had
slowed more than expected as a sign that the central bank is
less likely to hike rates and may eventually shift towards an
easing bias on policy.
                                
 The euro shed 0.7 percent from late New York trade to
$1.5208 <EUR=>.
                                
 The single currency dropped as far as $1.5195 on trading
platform EBS, a five-month low, with heavy selling spurred in
usually placid Asia trade after it fell through key chart
support near $1.5280 that had served as a base of support for
the past few months.
                                
 Traders cited heavy dollar buying by model funds, hedge
funds and other speculators as they rushed to unwind bets on a
deeper drop.
                                
 "The market's theme is shifting toward economic conditions
in each respective economy. It's no longer just about the
dollar," said a trader at a European bank.
                                
 The euro fell against the yen, dropping 0.5 percent to
166.75 yen <EURJPY=R>.
                                
 The dollar edged up 0.2 percent versus the yen to 109.61 yen
<JPY=>, holding near a seven-month high struck this week. But
traders said a climb above 110 yen may be difficult in the near
term.
                                
 The dollar index, a gauge of its performance against a
basket of major currencies, jumped 0.7 percent to 75.065 <.DXY>,
a 5-