FOREX-Dollar boosted by Citi results but sentiment shaky

* Citi's smaller-than-expected loss eases credit fears

* Euro capped as Trichet notes risks to growth

* Broad dollar sentiment still clouded by financial woes (Updates prices, adds comments, changes byline)

By Wanfeng Zhou

NEW YORK, July 18 (Reuters) - The dollar rose on Friday, heading for its largest weekly gain versus the euro in a month, after a smaller-than-expected quarterly loss from Citigroup Inc (C.N: Quote, Profile, Research, Stock Buzz) eased worries about the U.S. financial sector.

Citi's results added to positive earnings news this week from Wells Fargo & Co. (WFC.N: Quote, Profile, Research, Stock Buzz) and JPMorgan Chase & Co (JPM.N: Quote, Profile, Research, Stock Buzz). That allowed the dollar to regain some strength after slumping to a record low against the euro on Tuesday.

"Citi earnings have encouraged the market to take on more risk and given (the dollar) a lift," said Stephen Malyon, senior currency strategist at Scotia Capital in Toronto.

They were "consistent with other bank earnings seen earlier this week, which has turned sentiment around on the dollar a little bit."

In late afternoon trading in New York, the dollar index, which tracks the greenback's performance against a basket of six major currencies, was up 0.2 percent at 72.191 .DXY.

The euro slipped 0.1 percent to $1.5841 <EUR=>, well off its record high of $1.6037 set on Tuesday. The dollar was up 0.7 percent against the yen <JPY=> at 106.94 yen.

The euro was capped by European Central Bank President Jean-Claude Trichet's comments published on Friday that euro-zone growth is likely to be weak in the second and third quarters before staging a recovery.

Risks to growth were on the downside, Trichet said in a joint interview with four European newspapers. [ID:nL18138509].

"There's an emerging consensus of the euro's inability to show any convincing gains above $1.5950 or $1.60," said Ashraf Laidi, chief currency strategist at CMC Markets in New York.

"The euro is being set up for renewed weakness next week," he added, particularly if the Ifo survey survey shows further business sentiment weakness in Germany, the euro zone's largest economy.

Sterling edged down by 0.2 percent to $1.9973 <GBP=> on speculation the UK government would increase borrowing. See [ID:nL17632891].

For the week, the euro has lost 0.7 percent against the dollar, while the dollar rose 0.8 percent against the yen.  Continued...