* Dollar higher after U.S. initial weekly claims data
* Move may be on bets dollar will trade on fundamentals
* APEC ministers to call for market-oriented forex rates
* Pound continues to struggle
(Recasts, adds quote, updates prices, adds detail)

By Nick Olivari

NEW YORK, Nov 12 (Reuters) - The U.S. dollar rallied broadly in technical trading after a weekly jobless report triggered strength in the U.S. currency and momentum pushed it further through key levels.

While the dollar's early gains came against the yen after a report showed initial weekly jobless benefit claims lower than expected, dollar strength spilled over against the euro.

With the euro failing to break and hold above $1.5000 after testing that level for several days, the dollar gained rapidly across the board.

The U.S. government said jobless claims fell to 502,000 in the latest week from a revised 514,000 the prior week. The forecast was 510,000. [ID:nOAT004353] [ID:nN11377609].

Dollar/yen perked up a little bit on the news which is no real surprise considering that jobless claims continue to fall, which is encouraging, said Omer Esiner, senior market analyst at Travelex Global Business Payments in Washington.

The weekly report had greater impact on trading in recent months because of investor concern the U.S. economic recovery will be tepid and create few new jobs to replace those lost during the recession.

Investors bought dollars on bad news as a safe haven, given the U.S. taxpayer will always pay for government borrowings.

But some may now be buying on the bet the dollar will begin to trade fundamentally -- gaining on good economic news that bolsters chances the U.S. central bank will eventually hike interest rates and make dollar-based assets more attractive.

Midway through the New York session, the dollar was up 0.7 percent at 90.40 yen. The euro was down 0.8 percent at $1.4860 after touching $1.5049 on trading platform EBS on Wednesday. Analysts said most of the euro weakness was technical after it failed to break through resistance.

The dollar index .DXY, a gauge of the greenback's performance against six major currencies, was at 75.611, up 0.6 percent on the day. It was the best one-day performance since October 26, after touching a fresh 15-month low of 74.774 on Wednesday.

DOLLAR WEAKNESS

Dollar strength continued to build as the New York session progressed, though analysts said there was no new fundamental news to drive the momentum.

It just looks like continuation of the (dollar) strength after the data, said Sacha Tihanyi, currency strategist at Scotia Capital in Toronto.

Sterling struggled on the back of comments from the Bank of England on its quantitative easing programme in the previous session though it was off the session low. Sterling was last down 0.2 percent at $1.6533. 

But the steady pace of dollar selling in recent weeks -- on the view U.S. interest rates would remain low for some time -- remained intact analysts said, adding that Thursday's rally was little more than a consolidation, particularly given events in Asia.

With the release of the U.S. data, investors now shift their focus to a meeting of Asia-Pacific nations and other Asian regional issues, including a U.S. state visit to China next week.

The latest draft of a post-meeting communique from Asian Pacific Economic Cooperation leaders called for market-oriented exchange rates and interest rates -- effectively an argument for local currencies to appreciate against the dollar. [ID:nSP423373]

Some analysts said the focus on Asian currencies was also a factor capping gains in the euro on Thursday.

Pressure on China and other Asian countries to revalue their currencies could take away some of the upside pressure on the euro, said Marcus Hettinger, currency strategist at Credit Suisse in Zurich.

U.S. President Barack Obama visits China next week, and market participants expect currencies to be discussed. (Reporting by Nick Olivari; Editing by Andrew Hay)