FOREX-Dollar, yen drop versus euro; U.S. bank earnings loom

* Dollar, yen lower; higher-yielders advance

* Risk appetite improved by stocks rally, economy hopes

* Focus on how stocks react to U.S. bank earnings, GM (Adds comments, updates prices)

By Wanfeng Zhou

NEW YORK, April 13 (Reuters) - The dollar and yen fell against the euro on Monday as improved appetite for risk eroded the safe-haven appeal of the U.S. and Japanese currencies.

Risk sentiment has improved remarkably in recent sessions, buoyed by a five-week rally in U.S. stocks and growing hopes that the financial sector and global economy may be past the worst.

Higher-yielding currencies including the Australian and New Zealand dollars advanced, with investor optimism further boosted by a report that China was considering more stimulus steps to promote growth.

Light volume exacerbated price moves, with many financial centers closed for the Easter holiday and markets waiting for the U.S. corporate earnings season to get into full swing.

"Investor confidence is regaining despite stocks being down today," said Matt Esteve, a foreign-exchange trader at Tempus Consulting in Washington.