FOREX-Dollar falls as investors pare bets for higher rates

* Euro rises above $1.4050, dollar buying runs out of steam

* Investors reassess U.S. rate view, growth outlook

* Sterling firmer on data, lull in political storm

* 10 U.S. banks to pay back taxpayer funds (Adds comments, details. Changes byline)

By Vivianne Rodrigues

NEW YORK, June 9 (Reuters) - The dollar fell broadly on Tuesday, ending a two-day winning streak, as investors questioned whether the economy had improved enough to justify talk of higher U.S. interest rates by year end.

The euro rose above $1.4050 and sterling also rallied sharply while the U.S. Treasury said 10 of the country's biggest banks could repay $68 billion in taxpayer money received during the height of the credit crisis, boosting hopes the worst is over. See, [ID:nN09364348]

Nonetheless, investors were growing less certain that the Federal Reserve would raise rates in 2009, a view that gained traction last week after data showing a slower pace of U.S. job losses in May boosted the dollar and two-year Treasury yields.

Joseph Trevisani, chief market strategist at FX Solutions in Saddle River in New Jersey, said investors who bought the dollar recently betting on higher borrowing costs were at a "risk."