FOREX-Dollar eases as euro falls on ECB speculation

* Euro hits lowest since January 2013 against Swiss franc

* Commodity currencies gain (Adds New York open, quotes; changes byline and dateline; previous LONDON)

By Michael Connor

NEW YORK, Aug 27 (Reuters) - The dollar softened on Wednesday as traders focused on riskier currencies, while the battered euro hit a 19-month low against the Swiss franc amid speculation the European Central Bank will resort to quantitative easing.

Buying of the Australian dollar and other currencies from commodities-centered economies were also helped by the euro's weakness as investors exiting the common currency took on more risk, a strategist said.

After rising steadily, and this week repeatedly setting new 2014 highs, the dollar index was off 0.24 percent of 82.668 in New York trading. The basket of six currencies earlier on Wednesday touched 82.727, a 13-month peak.

The common currency also hit a 13-month low against the dollar of $1.3151 earlier on Wednesday, though it recovered later to a session high in New York of $1.32 after a report the ECB appeared unlikely to shift polices next week.

Currency markets this week have been preoccupied with expectations the ECB will loosen its monetary polices, according to Alan Ruskin, global head of foreign exchange strategy at Deutsche Bank in New York.

"Up until the last 12 to 24 hours that has certainly played dollar positive against the euro and euro negative against pretty much all currencies," Ruskin said. "Today there is a risk positive (sentiment) and currencies that would benefit from a risk perspective have done so."

The New Zealand dollar was the biggest mover among developed currencies, rising over 0.5 percent to $0.8381, after giant cooperative Fonterra announced a partnership with a Chinese food manufacturer to sell milk in China. Dairy is New Zealand's largest export earner.

The Australian dollar was up 0.35 percent against the U.S. dollar.

The euro has been hit in recent weeks by a slew of weak data from the euro zone, where inflation fell to 0.4 percent in July and is expected to have fallen to 0.3 percent in August in data published on Friday. That is far below the ECB's "danger zone" of 1 percent, let alone its target of just under 2 percent.

ECB chief Mario Draghi fueled speculation that monetary policy would be further loosened in the euro zone over the weekend by saying the central bank would use "all the available instruments" to deal with the threat of deflation at the U.S. Federal Reserve's annual conference in Jackson Hole.

Developments on Wednesday only worsened the picture for the euro zone: data showed German consumer morale fell for the first time in 1-1/2 years, while Italy's economy minister said the country must cut its growth forecast.

The euro hit 1.20715 Swiss francs on trading platform EBS, its lowest since January 2013. A sustained drop could test the Swiss National Bank's three-year-old pledge to cap the franc at 1.20 per euro, made in order to fight the risk of deflation.

(Reporting By Michael Connor in New York; Additional reporting by Jemima Kelly in London; Ian Chua in Sydney and Masayuki Kitano in Singapore; Editing by Diane Craft)