By Wanfeng Zhou
NEW YORK (Reuters) – The euro steadied against the dollar on Monday as a slight recovery in investors’ appetite for risk offset worries about the fiscal health of some euro zone countries.

The euro, however, stayed near an 8-1/2 month low versus the greenback and analysts said sentiment toward the single currency remained broadly negative as traders worried about debt troubles in Greece, Portugal and Spain.

Investors were disappointed the weekend Group of Seven meeting did not lead to concrete action to tackle the sovereign debt problems of these countries.

European ministers told their counterparts at the meeting they would ensure Greece sticks to its budget-cutting plan, but analysts said more was needed to restore confidence the problems would not upset the global economic recovery. [ID:nTOE61702V]

“Risk trends are likely to drive price action in the currency market going into the North American session as the economic docket is fairly light for today,” said David Song, currency analyst at DailyFX.com in New York.

“Over the next few days, we will have to see how policy makers in Europe plan to deal with the issues that are coming from Greece, Portugal and Spain,” he added.

In early trading, the euro EUR= was up 0.1 percent on the day at $1.3675. It had earlier risen above $1.3700, with traders citing German and east European buyers. It remained less than a cent above an 8-1/2-month low of $1.3585 hit on trading platform EBS on Friday.

A Greek public sector union warned of further strikes to fight austerity measures, prompting an increase in the cost of insuring Greece’s sovereign debt. Greek government bond yield spreads over German benchmarks also rose. [ID:nLDE61717F] [GVD/EUR]

The single European currency has shed nearly 10 percent from a 15-month high of $1.5145 hit in late November, as jitters about the fiscal problems in Greece spreading to Portugal and then to Spain intensified.

U.S. Commodity Futures Trading Commission data showed investors increased their bets on further dollar gains in the latest week. Dollar net long positions were at their highest in 11 months. [ID:nN05162244] The net short euro position versus the dollar rose to a record high, according to Barclays and Scotia Capital data. <-------------------------------------------------

For a graphic on euro short positions see here ------------------------------------------------->

“As long as EMU fears still loom and there is no strong signal from EU authorities that they will do something to tackle the situation in Greece, Spain and Portugal then euro downside potential will remain,” said Roberto Mialich, currency strategist at Unicredit in Milan.

Mialich said the euro would need to hold above $1.3750 for any rebound to become more convincing.

Against a basket of currencies, the U.S. dollar .DXY was down 0.2 percent at 80.268. However, it was not far from a high of 80.683 hit on Friday, its strongest since July 2009. Technical traders said the greenback had broken its 200-week moving average to trade above it for the first time since May 2009.

The dollar JPY= was up 0.1 percent at 89.40 yen and the euro EURJPY=R also rose 0.1 percent to 122.22 yen.

Among perceived higher-risk currencies, the Australian dollar AUD= was up 0.1 percent at $0.8680. An announcement at the weekend that an Australian miner signed a deal to sell $60 billion of coal to China over 20 years initially helped sentiment toward the Aussie. [ID:nB229544]

(Additional reporting by Jessica Mortimer in London) (Editing by Theodore d’Afflisio)

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