LONDON - THE European single currency rose above US$1.40 (S$2.03) on Monday, as dealers digested a long-awaited US government rescue package for the country's Big Three automakers ahead of the Christmas break.

In late morning trading, the euro advanced to 1.4090 dollars, which was up from 1.3913 dollars in New York late on Friday.

Against the Japanese currency, the greenback rose to 89.69 yen, down from 89.32 yen.

The yen has pulled away from last week's 13-year highs as investors adjusted their positions for the year-end, dealers said.

With markets in Europe, Japan and the United States closing this week for public holidays, currencies would likely trade within tight ranges, they added.

'The shortened week and potentially low trading volumes could see exchange rates get stuck in ranges,' said Barclays Capital analyst David Woo.

'There are still some important events to keep the foreign exchange market on its toes, however.

'The most important is likely to be European Central Bank President (Jean-Claude) Trichet's speech on Tuesday, with the market likely to focus on any comments about the recent sharp strengthening in the euro.'

The dollar found limited support after the White House announced an emergency loan of 13.4 billion dollars (9.5-billion-euro) for General Motors and Chrysler, which face the threat of imminent bankruptcy, dealers said.

'Markets were relieved over the announcement,' said Mr Chuo Mitsui Trust Bank forex head Yosuke Hosokawa.

Under the plan, which will make the funds available beginning Dec 29, the automakers will have to take drastic steps to demonstrate their viability by March 31 or the government could demand the loans be repaid.

The yen also took a hit after Japan said that exports fell at their fastest-ever rate in November due to the global recession and the strong yen, which makes Japanese goods less competitive.

The deficit, which was larger than a market average forecast of 208 billion yen, reversed a surplus of 784.4 billion yen a year earlier.

The Japanese government downgraded its December assessment of the economy for the first time in nearly seven years, describing it as 'worsening' due to rapidly cooling industrial production and corporate profits.

The British pound meanwhile languished close to a record low point against the euro. Sterling has been hit in recent weeks by mounting expectations that the Bank of England will cut interest rates further in 2009.

In trading in London on Monday, the euro changed hands at 1.4090 dollars against 1.3913 dollars late on Friday, at 126.56 yen (124.28), 0.9471 pounds (0.9317) and 1.5376 Swiss francs (1.5355).

The dollar stood at 89.69 yen (89.32) and 1.0891 Swiss francs (1.1035).

The pound was at 1.4906 dollars (1.4923).

On the London Bullion Market, the price of gold rose to 847.83 dollars an ounce from 835.75 dollars late on Friday. -- AFP