Dollar falls, but strong trend remains intact

NEW YORK (Reuters) - The dollar fell slightly on Monday as a modest recovery in overseas stock markets and commodity prices sparked the appetite for risk and prompted investors to opt for higher-yielding currencies.

The euro, however, remained stable against the dollar after investors remained concerned about the fiscal health of some euro zone countries such as Greece, Portugal and Spain.

"The turnaround in stocks around the world pushing the euro higher, but has been trading between $ 1.372 and 1.371," said John McCarthy, director of foreign exchange at ING Capital Markets in New York.

Shares on Wall Street, however, closed lower by eliminating the initial gains of the euro currency has become an indicator of risk appetite.

"There are still serious concerns about the status of sovereign debt in Europe. As general economic tone is negative for stocks, bad for the risk, but positive for the dollar," said McCarthy.

At the close of trading in New York, the euro remained broadly flat for the day at $ 1.3657. In the session, the currency hit a high of $ 1.3714.

The euro has lost almost 10 percent of its value since its peak 15 months of $ 1.5145 reached in late November due to growing fears that Spain and Portugal could face the same fiscal problems as Greece.

These fears persisted despite this weekend finance ministers and bankers from the Group of Seven that it will ensure that Greece fulfilled its debt reduction plan.

Analysts said further efforts were needed to reassure markets that the debt problems of the euro zone will not affect the global economic recovery.

A public sector union warned Monday in Greece with more protests against austerity plans in the country, leading to an increase in the cost of insuring the debt Hellenic. Yield spreads between bonds of Athens as the Germans advanced their peers in the day.

Against a basket of currencies, the dollar slipped 0.1 percent to 80.358. However, this indicator was near its maximum scored 80.683 on Friday, its highest level since July 2009.

Against the yen the dollar slipped marginally on the day at 89.28 yen while the euro fell to 121.95 yen.

Among the higher yielding currencies, the Brazilian real against the dollar rose 0.3 percent to 1.8750 reais.