UPDATE 1-Dubai is sign to avoid euphoria-Brazil c.bank head

* Brazil's Meirelles says Dubai is sign to avoid euphoria

* Says no Brazil banks exposed to potential Dubai default

(Updates with quote and background)

SAO PAULO, Nov 27 (Reuters) - A possible debt default by a Dubai state-owned conglomerate is an "alert signal" to avoid market euphoria, Brazil central bank chief Henrique Meirelles said on Friday.

Speaking at a Sao Paulo event, Meirelles also said that no Brazilian banks are exposed to the potential Dubai default.

"The recovery is slow, painful and subject to uncertainties, and this is what is happening," Meirelles said, referring to the situation in Dubai.

"It is one of the reasons why we have alerted against excessive euphoria."

Global markets have come under pressure in recent days after Dubai on Wednesday said it would ask creditors of two flagship firms, including conglomerate Dubai World, for a standstill on debt payments as part of a restructuring. For details, see [ID:nGEE5AQ13P].

That decision sparked concerns about the financial health of the Gulf region and worries over the potential exposure by banks around the world.

(Reporting by Vanessa Stelzer; Writing by Ana Nicolaci da Costa; Editing by Diane Craft)

((ana.nicolacidacosta@thomsonreuters.com; Reuters Messaging: ana.nicolacidacosta.reuters.com@reuters.net; +55-61-3426-7027))