* Dollar index rises to highest level in about 3 months
* Greenback firm after Friday's solid U.S. economic data
* Euro touches lowest in nearly 2 months
* Aussie hits fresh 6-yr low, hurt by gold's slide (Updates prices)
By Masayuki Kitano
SINGAPORE, July 20 (Reuters) - The dollar hit a three-month high against a basket of major currencies on Monday, after solid U.S. inflation and housing data supported expectations for the Federal Reserve to raise interest rates in coming months.
The greenback is coming off its best weekly performance in about two months, having risen last week after Fed Chair Janet Yellen reiterated that U.S. interest rates will probably be lifted later in the year.
The dollar gained further support from data on Friday that showed U.S. consumer prices rose for a fifth straight month in June, while housing starts jumped and building permits surged to an eight-year high. ID:nL2N0ZX0JV
Against a basket of six major currencies .DXY , the dollar traded at 98.041 at 0405 GMT. It rose to 98.061 at one point, its strongest level since April 23. The dollar index rose 1.9 percent last week, its best weekly gain since May.
The dollar also edged up 0.1 percent to 124.19 yen JPY= .
Yen-related trading activity was thinner than usual with financial markets in Tokyo closed on Monday for a public holiday.
The euro held steady at $1.08240 EUR= . Earlier, it hit a two-month low at $1.08205. A drop below its May low of $1.0819 would take the euro to its lowest level since late April.
The single currency has struggled even though worries about Greece exiting the euro zone have waned, at least for the time being, after Athens agreed to a debt deal with its creditors last week.
The euro has come under renewed pressure while the dollar has gained broadly, as investors shifted their focus back to the diverging outlook for monetary policies and interest rates among major economies.
"The euro's direction is probably still toward the downside," said Teppei Ino, an analyst for global markets research for Bank of Tokyo-Mitsubishi UFJ in Singapore.
In the short term, however, the market may lack fresh incentives to sell the euro further, especially with Yellen's congressional testimony out of the way, Ino said.
Greek banks are ready to open their branches across the country on Monday after a three-week shutdown, officials said, while German Chancellor Angela Merkel called for swift aid talks so Athens could also lift withdrawal limits. ID:nL1N0ZZ0FN
AUSSIE AND KIWI
The Australian dollar set a fresh six-year low, pressured by a slide in gold prices as well as caution ahead of forthcoming events, including a speech by Reserve Bank of Australia Governor Glenn Stevens and Australia's second-quarter CPI inflation data, both due on Wednesday.
The Aussie slid 0.5 percent to $0.7339 AUD=D3 . It fell to $0.7328 at one point, its lowest level since May 2009.
Gold XAU= plunged 4 percent to a five-year low at one point as it breached critical technical support levels, and as the U.S. dollar strengthened. ID:nL3N100195
The New Zealand dollar NZD=D3 , which set a six-year low $0.6498 on Thursday, inched up 0.1 percent to $0.6514 NZD=D3 .
"The Australian dollar and New Zealand dollar will remain sells on any sort of rally," said Jeffrey Halley, a trader for Saxo Capital Markets in Singapore, referring to the outlook going into Australia's CPI data and a Reserve Bank of New Zealand rate decision.
On Thursday, the RBNZ is expected to cut interest rates by 25 basis points to 3.0 percent, and many expect a further easing to at least 2.5 percent over time.