Feb 13 (Reuters) - Dollar index fell on Thursday, weighed down by PPI data, which markets interpreted as leaving the Fed on course for rate cuts later this year, and optimism about Ukraine peace negotiations. The dollar later trimmed losses after U.S. President Donald Trump started outlining his plans for reciprocal tariffs. Treasury 10-year yields slid after details of the January producer price data suggested core PCE, the Fed’s preferred inflation measure, is likely easing. Kremlin spokesman Dmitry Peskov said Ukraine would participate "one way or another" in any talks to end the war, but there would be a separate U.S.-Russian track to the talks. Ukrainian President Volodymyr Zelenskiy spoke with Polish Prime Minister Donald Tusk about conditions necessary to reach a lasting peace in Ukraine. EUR/USD hit a two-week high of 1.0446 at the close of the London session before trimming gains. Positive momentum from the Feb. 3 low supports pair though bulls remain concerned about U.S. tariff proposals, future European Central Bank rate cuts and upcoming German elections. A close above the Jan. 27 doji near 1.05 is required to see bullish momentum build.

EUR/CHF fell after a Swiss inflation report suggested prices may be basing, while broad dollar weakness sent USD/CHF back below its 200-DMA to its 21-DMA at 0.9428. USD/JPY slid beneath its 100-DMA at 153.25 and set a 152.93 session low before stabilizing. The pair largely tracked Treasury yields though monthly hedging and fix-related activity was also involved. Higher lows and a close above its 200-DMA at 152.74 supports bulls but its inability to test the key pivot level of 155 and wider option skews keeps bears optimistic. GBP/USD rose to a one-week high of 1.2542 before paring gains, buoyed partly by a report that Britain's economy unexpectedly grew in the final quarter of last year.

Treasury yields fell 5 to 10 basis points. The 2s-10s curve was down 4 basis points at +22.2bp.

The S&P 500 rose 0.53% with materials leading sector gainers.

WTI oil dipped to a new year-to-date low on Ukraine optimism before finishing nearly unchanged.

Gold rose 0.70% and copper gained 1.5% as the USD weakened. Heading toward the close: EUR/USD +0.47%, USD/JPY -0.86%, GBP/USD +0.68%, AUD/USD +0.33%, =USD -0.48%, EUR/JPY -0.47%, GBP/JPY -0.23%, AUD/JPY -0.63%.(Editing by Burton Frierson Reporting by Robert Fullem)