FOREX-Dollar hits 5-month lows as safe-haven demand wanes

* Dollar index nears 5-month low, euro near 5-month peak

* U.S. Treasury's Geithner says financial system healing

* Portugal finmin comments on euro boost single currency

* Sterling hits 5-month high against the dollar (Adds comment, Geithner's remarks, updates prices)

By Wanfeng Zhou

NEW YORK, May 20 (Reuters) - The dollar fell to its lowest level in nearly five months against the euro and a basket of currencies on Wednesday, as hopes that the worst of the global slump may be over dented the greenback's safe-haven appeal.

Investors' appetite for risk improved following a successful share offering from Bank of America (BAC.N: Quote, Profile, Research) and after U.S. Treasury Secretary Timothy Geithner said the financial system was "starting to heal" thanks to the government's bailout efforts. For full story, see [ID:nN20501612]

The growing confidence in the economy bolstered assets perceived to be riskier, such as stocks, emerging market currencies and commodity-based units such as the Australian and New Zealand dollars.

The market is "building on the risk appetite rally that we've seen recently," said Joe Manimbo, a currency trader at Travelex Global Business Payments in Washington.