FOREX-Dollar rises on return to riskier assets

* U.S. leading economic indicators better than expected

* Dollar's gains cut on reports of Ebola-like symptoms in New York doctor

* German and eurozone flash PMIs beat expectations

* China PMI shows mixed picture, fails to excite markets

* Kiwi falls 1.50 percent, dented by benign inflation data (Updates with Ebola report, adds latest prices, comment)

By Daniel Bases

NEW YORK, Oct 23 (Reuters) - The dollar rallied on Thursday as investors plowed cash back into riskier asset classes, underpinned by promising U.S. data and stronger-than-expected manufacturing reports in Europe and China.

The dollar rose 0.10 percent against a basket of major currencies, with the U.S. Dollar Index at 85.83. It benefited from both rising U.S. Treasury yields, which reflected an easing of investor concerns after last week's phalanx of selling, and a continuing U.S. equities rally.

However, the dollar trimmed gains in late trading as the U.S. stock rally pulled back on news that a New York City-based doctor was rushed to a hospital with Ebola-like symptoms. The patient had returned to the United States within the past 21 days after working in an Ebola-affected country in West Africa.

"You still have a knee-jerk reaction now, but I think for the time being the market is not pricing (Ebola) in as a serious risk," said Boris Schlossberg, managing director of currency strategy at BK Asset Management in New York.

The Conference Board's U.S. Leading Economic Index increased 0.8 percent in September after being flat in August, pointing to solid economic growth for the remainder of the year. New claims for U.S. unemployment benefits rose last week, but the underlying trend remained consistent with a firming labor market, data showed on Thursday.

"Now (NYSE: DNOW - news) that the fixed income market seems more content and yields are escalating, that is helping the dollar rally and is a vote of confidence in the U.S. economy," Schlossberg said.

Benchmark 10-year U.S. Treasury yields rose to 2.27 percent as investors sold out of the safe-haven asset.

"Dollar/yen is nicely rallying as a reversal of the carry trade is underway," said Sebastian Galy, senior currency strategist at Societe Generale (Paris: FR0000130809 - news) in New York. "So the risk-on trade is here as investors search for yield in a stronger performing U.S. economy."

The dollar surged as high as 108.35 Japanese yen, a gain of more than 1 percent to its best level since Oct. 8. The dollar fetched 108.16 yen late Thursday, up 0.94 percent on the day. The euro rose a similar amount to 136.82 yen.

The euro pulled up from a two-week low against the dollar earlier on Thursday, helped by the pick-up in eurozone business growth, but traded near the unchanged mark at $1.2650.

An improvement in purchasing managers' surveys in Europe and China eased some worries about the outlook for those two major economies.

Gains for the euro could be fleeting, with continued expectations of more monetary easing, risks of deflation and concerns over the health of the European banking sector.

The New Zealand dollar fell 1.24 percent to $0.7828 after softer-than expected inflation data that could give the Reserve Bank of New Zealand room to further delay its next interest rate hike. (Additional reporting by Anirban Nag in London, Masayuki Kitano in Singapore and Shinichi Saoshiro in Tokyo.; Editing by Catherine Evans, Lisa Von Ahn and Richard Chang)