* Euro rebounds from five-month low vs dollar, above $1.35
* Major currencies trade sideway as stock markets decline
* Trading volume muted on Japanese holiday
(Updates market action, changes byline, dateline, previous
By Richard Leong
NEW YORK, July 21 The U.S. dollar held steady
against major currencies on Monday as investors reduced holdings
of stocks and other risky assets on anxiety about escalating
violence in Gaza and Ukraine.
Demand for traditional safe-haven yen and Swiss francs
persisted but it was not strong enough to push their values out
of their recent trading ranges against the dollar, as traders
have been assessing whether the fighting in these regions would
affect the global economy, analysts said.
Volumes were light due to a holiday in Japan.
"There doesn't seem to be a bearish sentiment on the real
economy yet," said Sebastien Galy, currency strategist at
Societe Generale in New York.
The dollar index edged up 0.06 percent at 80.575
after hitting a four-week high last Friday.
The greenback was a tad lower against the yen at 101.27 yen
with benchmark yields hovering at their lowest in over
seven weeks. The dollar also slipped against the Swiss franc
, last trading at 0.8982 franc.
The euro recovered against the dollar despite a sell-off in
European shares. It traded steady at $1.3522,
well above Friday's five-month low of $1.3491. Support is seen
at $1.3460/80, an area that has provided a floor on several
occasions in the past 10 months or so.
"There might be a temptation for the market to probe those
lower levels," Galy said.
Wall Street shares were broadly weaker with the Standard &
Poor's 500 index losing 0.6 percent in early trading.
(Additional reporting by Anirban Nag in London and Ian Chua in
Sydney; Editing by James Dalgleish)