FOREX-Dollar slides after JPM results, euro, pound rise

* Dollar index hits lowest since early June on JPM results

* Euro, stg hit day's high vs dlr strong JPM performance

* Yen trims gains as risk demand picks up

(Reledes, updates throughout, changes byline)

By Naomi Tajitsu

LONDON, July 16 (Reuters) - The dollar hit a five-week low against a currency basket on Thursday after strong earnings from JPMorgan tarnished the U.S. currency's safe-haven appeal and stoked some demand for currencies seen to be high-risk.

JPMorgan Chase reported a net earnings per share of $0.28 in the second quarter of 2009, much more than expectations of around $0.05. It said that strength in its core consumer and investment banking businesses offset a jump in credit losses [ID:nWNAB7753].

After spending much of the day down against the dollar, the euro and sterling hit the day's highs, prodding the dollar index to 79.204, its lowest since June 11, as JPMorgan's performance suggested it is recovering from the financial crisis.

"Traders and investors are buying pro-risk currencies like sterling and are selling yen after Q2 earnings from JP Morgan," said Neil Jones, head of hedge fund FX sales at Mizuho in London.

"The market is responding."

The euro

Some market participants said that trade may become choppy ahead of options expiries in the pair later in the day. IFR reported that 200 million euros' worth of options with a $1.41 strike price were due to expire at the New York cut.

The dollar index was at 79.255, down slightly on the day.

Sterling

The dollar

The yen trimmed gains against higher-risk currencies including the euro and sterling, although those currencies remained down on the day after risk-averse traders had picked up the Japanese currency earlier in the day.

"There are only two trades in FX markets at the moment - risk on and risk off," said Maurice Pomery, managing director at Strategic Alpha.

CITI, BOA NEXT

JPMorgan's strong performance comes on the heels of stellar earnings from Goldman Sachs earlier in the week, which has helped to cool some risk aversion.

Citigroup , General Electric and Bank of America are due to announce their earnings on Friday.

Market participants were uncertain whether the two banks would fare as well as Goldman and JPMorgan did in April-June, and some said that weakness in any of these results may dent hopes for a global economic recovery, limiting demand for risk.

Analysts added that some traders took news of bailout talks ending between the U.S. government and CIT Group , a major lender to small and mid-sized U.S. firms [ID:nN15377230], as an excuse to take profits on those recent gains.

The New Zealand dollar

The Australian dollar fell in sympathy, sliding 0.3 percent against its U.S. counterpart