GLOBAL MARKETS-Wall St steps back, euro gains on Weidmann comments
* Wall St slightly lower as it consolidates after recent highs * Euro recovers from earlier low, currency war talk continues * Brent crude trims declines, U.S. crude jumps By Leah Schnurr NEW YORK, Feb 11 (Reuters) - The euro rose on Monday as a European policymaker dismissed talk of intervening to weaken the currency, while U.S. stocks were unable to get further traction after hitting multi-year highs. Tensions over whether some countries are deliberately trying to weaken their currencies were in focus, with French Finance Minister Pierre Moscovici saying euro zone countries need closer cooperation on exchange rate policy. But that was offset by comments from European Central Bank policymaker Jens Weidmann, who said that discussions about an overvaluation of the euro are simply a diversion from governments' task of sorting out their economies. He said the euro was not overvalued. After three days of declines against the dollar, the euro was lifted by investors looking to buy at low levels, and the currency accelerated its gains after Weidmann's remarks. "The idea of being interventionist in currencies is not particularly new. But at the moment, because some of the bigger players are at the forefront, it feels like a much more pressing issue for markets," said Daragh Maher, FX strategist at HSBC. The euro was up 0.4 percent at $1.3411 as speculators bought into the earlier dip to near three-week lows. European Central Bank President Mario Draghi suggested last week that further euro strength could lead to an interest rate cut. French President Francois Hollande has also urged the euro zone to set an exchange rate target. The Group of Seven major industrial nations may be about to add its weight to the debate in an effort to cool the rhetoric. Two G20 officials told Reuters the group was considering making a statement this week reaffirming a commitment to "market-determined" exchange rates. G20 finance ministers and central bankers meet in Moscow on Friday and Saturday. "The G20 meeting in Moscow this week seems certain to focus on 'currency wars' but beyond a bland call for countries not to engage in competitive devaluations, it's hard to see what concrete steps can be taken at this stage," said Kit Juckes, FX strategist at Societe Generale in London. The fear of competitive devaluations by major economies has been building since new Japanese Prime Minister Shinzo Abe began putting pressure on the country's central bank to take aggressive easing measures to revive the nation's economy. Wall Street was little changed as a lack of major economic news on Monday gave investors little reason to push the market higher, for now. Markets showed little reaction to a speech from Federal Reserve Vice Chairman Janet Yellen. Seen as a potential successor to Fed Chairman Ben Bernanke next year, Yellen said the central bank's aggressive and ongoing easing of monetary policy is warranted given the state of the labor market. Investors will get some insight into President Barack Obama's plan for spurring the economy in his State of the Union address on Tuesday. Encouraging U.S. and Chinese data last week helped push U.S. equities higher, sending the tech-focused Nasdaq to a 12-year closing high and the S&P 500 to a five-year peak. Less than two months into the year, the S&P 500 is up more than 6 percent, but the rally has stalled with the S&P and Dow industrial indices near record highs. "It's really the valuation and indications that the economy is improving that have pushed the market higher," said Tim Ghriskey, chief investment officer at Solaris Asset Management. "We would have to see a probable correction before heading higher and that could come from weak economic data in the future." In mid-afternoon trading, the Dow Jones industrial average was off 29.20 points, or 0.21 percent, to 13,963.77. The Standard & Poor's 500 Index slipped 1.69 points, or 0.11 percent, to 1,516.24. The Nasdaq Composite Index edged down 5.24 points, or 0.16 percent, at 3,188.64. Google weighed on the market after the company said in a filing that Executive Chairman Eric Schmidt is selling roughly 42 percent of his Google stake. Google's shares fell 0.8 percent to $778.73. The benchmark 10-year U.S. Treasury note was up 1/32 to yield 1.948 percent. MSCI's world equity index was down 0.3 percent, and the pan-European FTSEurofirst 300 index ended down 0.7 percent. Brent crude prices trimmed losses after earlier dropping below $118 a barrel as concern about the euro zone economy eclipsed stronger-than-expected demand growth in China. Trade data out of China had sent Brent crude to a nine-month high on Friday. Brent crude fell 76 cents to $118.14 a barrel. U.S. crude futures gained $1.31 to $97.03, narrowing the spread between higher priced Brent futures and their U.S. counterpart after it widened last week.