FOREX-Pound, euro rise vs dollar as risk aversion ebbs.....................

* Barclays profit forecast boosts sterling

* Euro rises with stocks, dollar up vs yen

* Euro, pound still pressured by bank sector concerns

* Sentiment remains fragile amid global growth concerns

(Updates prices, adds comment, changes dateline, byline)

By Steven C. Johnson

NEW YORK, Jan 26 (Reuters) - Sterling and the euro rose against the dollar on Monday, rebounding from last week's losses as European stock prices rose and British bank Barclays said it would report a pretax profit for 2008.

The slightly sunnier mood also lifted commodity currencies such as the Canadian dollar CAD= and nudged the U.S. dollar higher against the yen ahead of a Federal Reserve policy-setting meeting later this week.

But the British pound was still not far from a 23-year low against the greenback, and worries about the banking sector and the global economy kept investors cautious.

"The Barclays news was the first good news from the UK financial sector in a while and boosted the idea that maybe the UK is stepping back from the brink," said David Watt, senior currency strategist at RBC Capital Markets in Toronto.

"But sentiment is still quite shaky, and at the first sign of bad news, people are prepared to run for the hills again."

European shares were more than 1 percent on Monday, boosted by Dutch financial group ING (ING.AS), which said it would tap into government guarantees, and Barclays (BARC.L), which said it would not need new funding.

Early in New York, the dollar was up 0.3 percent at 89.09 yen JPY= while the euro rose 0.8 percent to 116.30 yen EURJPY=, well off a multiyear low near 112 yen last week.

The euro also changed hands at $1.3112 EUR=, up 0.9 percent, while sterling rose 0.7 percent to $1.3902 GBP=. Last week, it hit a 23-year low at $1.3502.

Earlier, sterling was pressured after Bank of England Monetary Policy Committee member David Blanchflower was quoted on Sunday as saying British interest rates still had a way to go if they were to follow the United States [ID:nLO542246].

Key US rates are now targeted in a range of zero to 0.25 percent. British rates are at 1.5 percent.