LONDON, Sept 9: The dollar was lower in late trade on Tuesday as players took profits on sharp gains made after the US government bailed out two key mortgage backers, helping ease concerns about the economic outlook.

Dealers said that after the takeover of Fannie Mae and Freddie Mac had seen sharp gains for the dollar and stocks on Monday, profit-taking and more cautious views on the move prevailed on Tuesday.

In late London trade, the euro rose to $1.4167 from $1.4129 late Monday in New York.

Against the Japanese currency, the dollar fell to 107.49 yen from 108.27 yen on Monday.

The yen found support as investors cut their exposure to risky bets despite the US government bailout of Fannie Mae and Freddie Mac over the weekend, dealers said.

However, on Tuesday, the markets were more uncertain that the US plan would really stave off further credit-related losses and help the economy, with analysts worried about the costs involved.

“The net result may be that the move has resolved some uncertainty -- about both the timing and precise details of any takeover -- but not to change very much more,” Barclays Capital analyst David Woo said in London.

“A government bailout of some form had been widely expected, the key question had been when. It seems unlikely to make any meaningful change to the slowdown of global growth beyond some support for US growth.

“While it does help the financial sector, it is far from curing all its problems. Banks are still part way through a prolonged period of consolidating their balance sheets,” Woo added.

Some dealers said the plan could also become costly for the US taxpayer without repairing the fundamental problems of the housing market.

“There are many areas in the government’s plan that remains unclear and fresh concerns have cropped up over the US economy, including its finances,” said Chuo Mitsui Trust Bank chief strategist Yosuke Hosokawa.

“Markets are questioning: is the US really alright?”

Dealers said US July home sales data again highlighted the weakness in the US property market, while most players expected no change in output quotas at the OPEC meeting in Vienna later in the day.

In late London trade on Tuesday, the euro changed hands at 1.4167 dollars against 1.4129 late on Monday, at 151.85 yen (152.96), 0.8013 pounds (0.8034) and 1.5968 Swiss francs (1.5985).

The dollar stood at 107.49 yen (108.27) and 1.1296 Swiss francs (1.1311).

The pound was at $1.7640 ($1.7582).

On the London Bullion Market, the price of gold fell to $781.75 per ounce from $808 late on Monday.—AFP