FOREX-Euro rises vs dollar, but stays near multi-month low

* Euro recoups some losses, but remains fragile

* G7 on Greece inadequate, more needed-analysts

* IMM data shows speculators increase bets on euro losses (Updates prices, adds quotes)

By Wanfeng Zhou

NEW YORK, Feb 8 (Reuters) - The euro edged higher against the dollar on Monday but stayed close to an 8-1/2 month low as a slight recovery in investors' appetite for risk offset worries about the fiscal health of some euro zone countries.

A modest rebound in Wall Street stocks during morning trading helped pushed the euro to a session high above $1.37, though sentiment toward the single currency remained broadly negative, analysts said.

This weekend's Group of Seven meeting did not lead to concrete action to tackle the sovereign debt problems of euro zone countries such as Greece, Portugal and Spain.

European ministers told counterparts at the meeting they would ensure Greece sticks to its budget-cutting plan. Analysts said more was needed to reassure markets euro zone debt problems would not upset global economic recovery. [ID:nTOE61702V]

"The equity market has come back to flat and with that ...we saw euro/dollar popping towards the $1.37 level," said Matthew Strauss, senior currency strategist at RBC Capital Markets. "The move that we've seen today in euro/dollar is still confined to a very narrow range and the market is still waiting for direction."

In midday trading, the euro EUR= was up 0.3 percent on the day at $1.3696, not far from a level of $1.3585 hit on trading platform EBS on Friday, its lowest since May. The currency had earlier hit a session peak of $1.3714, according to Reuters data.

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 over growing fears Portugal and Spain could face the same kind of fiscal problems Greece is suffering.

U.S. Commodity Futures Trading Commission data showed investors increased 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 rose to a record high, according to Barclays Capital and Scotia Capital data.

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"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, a 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 0.4 percent at 80.124. 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 flat at 89.35 yen while the euro EURJPY=R rose 0.3 percent to 122.46 yen.

Among perceived higher-risk currencies, the Australian dollar AUD= was up 0.3 percent at $0.8700. An announcement at the weekend that an Australian mining firm 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 Andrew Hay)