By Julie Haviv NEW YORK, Aug 29 (Reuters) - The dollar gained against the yen and Swiss franc on Monday as strong U.S. consumer spending data reduced fears of another recession. U.S. consumer spending, which accounts for about 70 percent of economic activity, rebounded strongly in July from June. Weak pending sales of existing homes, however, showed the housing sector remains soft. 'This morning's U.S. economic reports will make Fed officials feel slightly better about the outlook for the U.S. economy but the slower rise in incomes relative to spending means that their they cannot take their hands off the go button,' said Kathy Lien, director of currency research at GFT Forex. Federal Reserve Chairman Ben Bernanke last week opted to postpone a decision on more stimulus, giving the central bank more time to assess the state of the U.S. economy. The Fed's move to leave the door open for more measures heightens the focus on upcoming economic data, including the closely watched August U.S. employment report on Friday. There was plenty of risk appetite on Monday , with global stocks rising after news of a merger between Eurobank and Alpha Bank, the second- and third-largest banks in Greece. The deal suggested Europe was working through its financial problems and heading in the right direction, analysts said. 'There is a general risk-on theme today and the stabilization of the Greek banking sector can partly be blamed as it is euro-positive, particularly for the euro-Swiss franc cross,' said Greg Anderson, G10 strategist at CitiFX, a division of Citigroup in New York. The euro last traded up 1.5 percent to 1.1864 francs . The dollar was up 1.5 percent to 0.8182 franc . Data from the Commodity Futures Trading Commission on Friday showed generally light positions except in the franc. The net long-Swiss franc positions of leveraged funds was near a record high of $2.8 billion. 'The report showed a surprising number of investors who were long the Swiss franc and so some of what we are seeing today is a reaction to that data, with people going after those stops,' Anderson said. The franc has been under broad pressure after Swiss bank UBS threatened on Friday to charge clients a fee on deposits, aiming to discourage them from using some accounts to hoard the safe-haven currency because of financial market volatility. New York City, meanwhile, was back to business after Hurricane Irene. Higher Treasury yields favored the dollar against the yen. Against the yen, the dollar traded up 0.4 percent at 76.94 yen in early afternoon New York trade, holding above the record low plumbed earlier this month at 75.941 yen. The euro edged higher against the dollar, rising 0.1 percent to $1.4508, with support seen around the 100-day moving average at $1.4366. (Additional reporting by Nia Williams and Neal Armstrong; Editing by Andrew Hay) Keywords: MARKETS FOREX

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