FOREX-Dollar rises vs euro as French election development weighs

* Euro falls vs dollar after hitting 2-week high

* Juppe rules out candidacy in French presidential election

* North Korea's missile test underpins safe-haven yen

* Dollar index flat (Updates to U.S. market open, adds quote, data, changes byline, previous LONDON)

By Dion Rabouin

NEW YORK, March 6 (Reuters) - The dollar rose against the euro on Monday after a former French prime minister ruled out standing in the country's presidential elections, a development seen as likely boosting the chances of anti-European Union candidate Marine Le Pen (Other OTC: PENC - news) .

Alain Juppe, who served as France's prime minister from 1995 to 1997, announced earlier Monday he would not seek the country's presidency.

A poll on Friday had showed that if Juppe replaced the scandal-hit Francois Fillon as the center-right candidate, he would likely win the election's first round, with centrist candidate Emmanuel Macron coming second - a scenario that would knock Le Pen out of the race.

Although polling suggests the far-right Le Pen would lose to Macron or Fillon in a run-off, investors are mindful of surprise vote outcomes.

The news sent the euro 0.2 percent lower to $1.0597, down from a two-week high it touched earlier in the day.

Market unease over elections this year in France, Germany and the Netherlands has constrained the euro, despite improving economic readings across the euro zone, analysts said.

"The election drama, as long as that continues it will continue to drive (the euro), to keep it subdued," said Juan Perez, currency strategist at Tempus Inc in Washington. "So instead of going to $1.07 because of good economic numbers, it stays between $1.05 and $1.06 because of that drama going on behind it."

The dollar also moved higher against the Swiss franc, Swedish crown and British pound.

News that North Korea had fired four ballistic missiles over the weekend and U.S. President Donald Trump's unverified claims that his predecessor, Barack Obama, had wiretapped his correspondence from Trump Tower spurred buying of the safe-haven yen.

The dollar dropped 0.15 percent against the yen to 113.83 yen, down from Friday's two-week high of 114.75 yen.

After retreating to a one-week low in early European trading, the dollar was last flat against a basket of world currencies at 101.53.

(Editing by Ed Osmond and Nick Zieminski)