* Dollar on back foot after early gains
* Slowing recovery momentum, plunging yields hurt US dollar
* Euro consolidates after speculators build record long positions
* Graphic: World FX rates in 2020 https://tmsnrt.rs/2RBWI5E
By Hideyuki Sano
TOKYO, Aug 3 (Reuters) - The U.S. dollar gave up brief early gains on Monday as mounting concerns about a slowing U.S. economic recovery from the coronavirus pandemic hobbled the currency after a brief rebound late last week.
The euro traded almost unchanged at $1.1768, coming off a low of $1.1741 touched earlier in the session, though it is still more than a cent below Friday's two-year high of $1.1908.
The common currency hit a speed bump on some technical signs of being over-bought in the near-term, and with speculators' long positions hitting a record level, said Minori Uchida, chief currency analyst at MUFG Bank.
"But the dollar's decline is likely to continue. Real U.S. interest rates are declining even as the country is running a big current account deficit, a situation we hadn't have for a long time," he said.
U.S. bond yields have fallen to their lowest level since the pandemic-induced market turmoil in March, with the 10-year rate slipping to near 0.50%, undermining the yield attraction of the dollar.
U.S. bonds looked even less attractive when adjusted for inflation expectations, with the yield on inflation-protected U.S. 10-year Treasuries falling to a record low below minus 1%.
The dollar changed hands at 105.90 yen, giving up early gains to 106.44, which traders saw as an extension of Friday's rebound from 4-1/2-month lows of 104.195 triggered in part by month-end buying.
Investors have reasons to worry about the U.S. outlook as policymakers have so far struggled to clinch a deal to pump more money into the world's largest economy even as an expanded unemployment benefit, worth about $75 billion per month and accounting for nearly 5% of personal income, expired on Friday.
White House Chief of Staff Mark Meadows said on Sunday he was not optimistic on reaching agreement soon on a deal for the next round of legislation to provide relief to Americans hit hard by the coronavirus outbreak.
A growing U.S. fiscal deficit to finance the stimulus prompted Fitch Ratings to revise the outlook on the United States' triple-A rating to negative from stable.
While the market has not shown immediate reaction to the downgrade, it still marked a sharp contrast with the European Union, which got a lift from Standard and Poor's decision to upgrade its rating outlook to positive from stable.