FOREX-Dollar steady near 5-month low, US auctions eyed

* Traders eyeing US Treasury debt auctions this week

* Activity subdued as markets shut in U.S., Britain

By Rika Otsuka

TOKYO, May 25 (Reuters) - The dollar steadied on Monday, holding near a five-month low hit against a basket of currencies last week when concern that the United States may lose its AAA-rating status prompted investors to sell the world's reserve currency.

Trade was slow as investors kept to the sidelines ahead of the U.S. Treasury's two-, five- and seven-year debt auctions totalling $101 billion this week -- an important test of investor appetite for dollars and dollar assets.

Market players also hesitated to take fresh positions as U.S. financial markets are closed on Monday for the Memorial Day holiday, while British markets are also shut for a bank holiday.

"Few think U.S. sovereign credit ratings will be cut in the near-term," said Minoru Shioiri, senior manager of FX trading at Mitsubishi UFJ Securities.

"But market participants are likely to keep using U.S. rating concerns as an excuse to sell the dollar if the Treasury's auctions fail to attract demand."

The dollar index .DXY, a gauge of the greenback's performance against six major currencies, inched up 0.1 percent to 80.081, still near the five-month trough of 79.805 hit on Friday.

The dollar index lost 3.7 percent last week, its steepest weekly fall since the Federal Reserve launched its large-scale buying of U.S. Treasuries in late March, which slammed the reserve currency on worries the move could cause an effective devaluation.

The dollar has come under pressure after Standard & Poor's said on Thursday it could downgrade Britain's triple-A credit rating, a move that sparked broad selling of U.S. stocks and bonds on fears that record U.S. deficits could lead to the same warning there. [ID:nLL180301]

The dollar slipped 0.2 percent from late last week to 94.57 yen JPY=. It struck a two-month low of 93.85 yen on trading platform EBS on Friday.

The euro was little changed on the day at $1.3993 EUR=, within striking distance of $1.4051, its highest since early January. (Reporting by Rika Otsuka; Editing by Hugh Lawson)