* U.S. dollar slips, bank package uncertainty a minor blip
* U.S. financial stability plan to be outlined on Tuesday
* Euro hits nearly two-week high vs dollar
(Recasts, updates prices, adds quotes, changes byline)
By Nick Olivari
NEW YORK, Feb 9 (Reuters) - The dollar fell broadly on
Monday as investors focused on the expected positive impacts of
a U.S. bank bailout package on the global economy, weakening
some of the safe-haven bid for the U.S. currency.
Mostly ignoring a delay in the announcement of the plan,
investors boosted the higher-yielding Australian and New
Zealand dollars on rising risk appetite.
"One of the things that has been driving the dollar was
fear and lack of risk appetite," said Joseph Trevisani, chief
market analyst at FX Solutions in Saddle River, New Jersey. "So
if the financial bailout package gives people confidence the
financial system problems are behind us, they will be more
disposed to take foreign currency risk and that will lead away
from the dollar."
Midafternoon in New York, the euro was up 0.8 percent
percent at $1.3031 <EUR=>. It earlier rose to a high of
$1.3093, its strongest level since Jan. 29.
The dollar was down 0.4 percent against the yen at 91.59
<JPY=>, though well off a session low of 90.90. The euro was up
0.4 percent against the yen at 119.40 yen <EURJPY=>, recovering
from an earlier session low of around 117.07 yen.
The Australian dollar rose 0.7 percent versus the greenback
to US$0.6806 <AUD=>, while the New Zealand currency surged 1.8
percent against the U.S. unit to US$0.5409 <NZD=>.
President Barack Obama's administration delayed
announcement of the bank rescue plan, which had been scheduled
for Monday, until Tuesday as the new administration pressed
lawmakers to settle their differences over a giant economic
stimulus plan in Congress.
A crucial procedural vote on the $827 billion stimulus
package by the Senate was expected later on Monday, with a
final vote on the legislation likely on Tuesday. That will set
the stage for fierce wrangling as negotiators try to reconcile
it with an $819 billion House of Representatives version passed
earlier without any Republican support. [].
Over the last few months the dollar has gained in the face
of bleak U.S. economic news, with investors buying the currency
on the view the U.S. government was the most aggressive among
industrialized nations in tackling the credit crisis. That
should help the U.S. economy emerge from recession quickly and
provide underlying support to the dollar, analysts and
investors say.
DISCONCERTED
To be sure, some investors were disconcerted by Monday's
delay in the announcement of the financial rescue plan.
They said the delay undermined the dollar because they
viewed the bailout package as specific to the United States and
any obstacle or evidence of political wrangling would be
negative for the U.S. economy and ultimately the dollar.
But analysts said most investors seemed to be looking past
the delay and anticipating the details of the bank rescue
package and the Senate's vote on the stimulus plan this week.
"Ultimately, that package is going to pass, and I think the
markets are anticipating a significant announcement and so the
tenor in the FX market is the unwinding of some risk-aversion,"
said Matthew Strauss, senior currency strategist at RBC capital
Markets in Toronto.
Sterling rose 0.9 percent to $1.4937 <GBP=> after UK bank
Barclays Plc <BARC.L> earlier booked a bigger-than-expected
annual profit of over 6 billion pounds and said credit market
losses were waning. The pound earlier hit a high of $1.4984, a
nearly one-month high, according to Reuters data.
With little on the economic calendar on Monday, market
focus stayed firmly on Congress, which divided along party
lines on the economic stimulus and bank bailout plans.
(Reporting by Nick Olivari and Gertrude Chavez-Dreyfuss;
Editing by Dan Grebler)
