* Dollar rises versus euro as oil price falls further
* Dollar index off one-year high on mild profit taking
* Jury still out on Fannie Mae, Freddie Mac bailout
*
(Recasts, changes byline, dateline, previous LONDON)
By Lucia Mutikani
NEW YORK, Sept 9 (Reuters) - The U.S. dollar rose versus
the euro on Tuesday as oil prices fell, but broader gains were
limited on mild profit-taking after a rally ignited by the
government's bailout of mortgage firms Fannie Mae and Freddie
Mac.
Analysts said increasing signs of a global economic
slowdown outside the United States were supporting the dollar,
as were some views that the U.S. economy may be the first to
recover.
"Oil is lower. Ultimately it looks to be that the euro is
in the process of a parabolic decline and cannot get above the
1.4150 area, so sellers just came back into the market," said
Brian Dolan, head of Currency Research at Forex.com in
Bedminster, New Jersey.
In New York morning session, the euro traded down 0.3
percent at $1.4086 <EUR=>, not for from an 11-month low of
$1.4049 touched in overnight trade.
Oil fell to a new five-month low as expectations OPEC would
leave formal output targets steady outweighed concerns over the
threat of Hurricane Ike to U.S. Gulf of Mexico energy
infrastructure. Other raw materials also fell; lower commodity
prices tend to bolster the dollar.
U.S. crude <CLc1> traded down $1.80 at $104.51 per barrel
after hitting a fresh five-month low of $104.23 a barrel
earlier.
The ICE Futures U.S. dollar was up 0.1 percent at 79.652
<.DXY>. The index, which measures the dollar's value against a
basket of currencies, touched a year-high the previous session.
Analysts cited some profit-taking.
"Given the dollar gains we have seen, it's just time for
some profit-taking. We have seen some cutting back on long
dollar positions," said Ronald Simpson head of global currency
analysis at Action Economics in Tampa, Florida.
"The jury is still out a little bit with regard to the
bailout of Freddie and Fannie. For the most part, the markets
are taking it as a positive, but the dollar cannot rise in a
straight line. The up trend is still intact."
The Treasury announced a conservatorship plan for Freddie
Mac <FRE.N> and Fannie Mae <FNM.N> on Sunday, sparking a dollar
rally on perceptions that the measures would restore confidence
in U.S. assets and help the housing market's recovery.
The dollar has rallied on the view that other countries
will track U.S. economic weakness, and a souring global growth
outlook continues to favor the dollar, other analysts said.
Sterling was flat as a report showed that British
Manufacturing output fell for the fifth straight month in July.
The pound was last at $1.7572 <GBP=>.
(Editing by Walker Simon)
