By Tamawa Desai LONDON (Reuters) - The dollar was broadly lower on Wednesday, losing ground against currencies including the pound, yen and Australian dollar, while the euro gained on results of a European Central Bank cash tender offer. The volume of bids at the one-year tender was lower than expected. That implied financial conditions in the euro zone were improving and that there may be less need for the ECB to flood the money market with liquidity. "The economy has turned a corner and the bottom line is that central banks are making the first tentative steps toward unwinding the emergency liquidity programmes, and maybe the ECB will do so in the next few months as well," said Kenneth Broux, financial markets economist at Lloyds Banking Group. The implied euro zone-U.S. interest rate gap based on March 2010 Euribor and eurodollar futures contracts widened by 5 basis points to 31 basis points, Reuters charts showed, boosting the euro's yield appeal. The euro was up 0.5 percent on the day, holding near a session high of $1.4673 hit after the tender results. By 1111 GMT (7:11 a.m. EDT), the dollar index was down 0.7 percent on the day at 76.565 .DXY, within sight of its eight-month low just below 76.0 struck last week. A turnaround in equity markets, with U.S. stock futures in positive territory, also weighed on the dollar, said Geoffrey Kendrick, currency analyst at UBS. YEN EDGES UP, STERLING GAINS The dollar dipped to 89.36 yen, close to an eight-month trough of 88.23 yen hit on Monday. The yen gained some momentum after Japanese Finance Minister Hirohisa Fujii said Tokyo had no plans to bring up the yen's recent rise at a weekend Group of Seven finance leaders' meeting. Sterling drew further support from the biggest rise in UK consumer morale for 14 years, extending Tuesday's rebound on talk the Bank of England was not likely to cut the rate of interest it pays on bank deposits any time soon. The pound was up 0.8 percent on the day at $1.6099. Meanwhile, hawkish comments from Norway's central bank chief pushed the Norwegian crown to a 11-month high against the euro. Norges Bank Governor Svein Gjedrem said the central bank may start to raise interest rates from record low levels sooner than it projected in June. The central bank kept its key rate unchanged last week, but said it had considered raising it. Analysts expect a hike as early as October. Other big gainers included the Australian and New Zealand dollars. The Aussie rose more than 1.0 percent on the day to a 13-month peak of $0.8837 after strong retail sales data added to the case for a rise in interest rates as early as November.

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