* Dollar falls broadly on Russia comments on FX reserves * Euro climbs after surprisingly strong ZEW survey * Market anticipates comments from BRICs meet (Adds comments, details, updates throughout) By Naomi Tajitsu LONDON, June 16 (Reuters) - The dollar fell broadly on Tuesday after what were seen as dollar-negative comments from Russia, while the euro extended gains after a strong reading of German economic sentiment. Before a BRICs summit later in the day, Russian President Dmitry Medvedev said the world needs new reserve currencies, which traders took as signals that it may be looking to cut the share of U.S. assets in its currency portfolio [ID:nLG426293]. The German think tank ZEW on Tuesday said its index of economic sentiment rose to 44.8 in June, surging from 31.1 in May and exceeding expectations for a 35.0 print [ID:nLG831670]. This suggested that market participants are hopeful that the euro zone's largest economy will recover later in the year. Some analysts said the strength in the index was somewhat expected, given the recent rally in stocks, which are seen to be highly correlated with the survey. "The survey is telling us what we already knew, that financial market conditions have definately improved," said Adam Cole, global head of currency strategy at RBC in London. "We've seen a fairly sustained rally in equities (so) it was fairly inevitable that the ZEW would rise as a result." He added that the next test of health for the German economy would be whether the strength seen in the ZEW survey would feed through to other measures of sentiment and industry. By 1021 GMT, the euro traded 0.6 percent higher at $1.3975, after climbing as high as $1.3923 after the ZEW poll. The pair recovered from $1.3748 touched on trading platform EBS earlier in the day, its lowest since May 21, as the dollar was unable to hold gains made after falling stock prices raised risk aversion and prompted safe-haven demand for the dollar. Losses versus the euro helped to push the dollar index .DXY down nearly 1 percent on the day. Sterling rose against the dollar, after a smaller-than-expected fall in UK inflation fuelled expectations that the Bank of England may not need to continue quantitative easing much longer. It rose to its highest level of the year against the euro to 84.39 pence . The dollar traded 1.0 percent lower at 96.80 yen, after falling to 96.08 yen on EBS in early European trade. The euro was 0.5 percent lower at 134.25 yen, not far from a three-week low hit earlier in the day. Struggling European shares .FTEU3 kept some traders risk averse, prompting broad, safe-haven flows into the yen. Traders offered limited initial reaction to The Bank of Japan's upgrade of its economic assessment on Tuesday, which came after the central bank held interest rates at 0.1 percent. BRICS AWAITED Traders shunned the dollar ahead of the summit of BRICs emerging nations -- Brazil, Russia, India and China -- in Russia, which comes amid rising market speculation that countries may be looking to diversify reserves portfolios away from U.S. Treasuries in the future. Medvedev's comments came after Russian Finance Minister Alexei Kudrin at the weekend said the dollar's status as the world's main reserve currency would unlikely change in the near term, clouding the market's understanding of Moscow's position. Any negative remarks on the dollar, particularly from China, which holds the world's largest pile of currency reserves, would hurt confidence in the U.S. currency, analysts said. "(The dollar's slide) underlines the likely sensitivity of the FX market to comments emerging from today's meeting," analysts at Barclays wrote in a research note.

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