NEW YORK ? The dollar lost ground against the euro Friday, after a US financial reform deal hammered out in Congress encouraged investor appetite for risk, benefiting the single European currency.

At 2100 GMT, the euro changed hands at 1.2381 dollars in New York, after fetching $1.2328 late Thursday.

The dollar remained stable against the Japanese currency, at 110.51 yen, the same as a day earlier.

Samarjit Shankar, an analyst at The Bank of New York Mellon, said he detected "a slight recovery in risk appetite as a result of which the US dollar is net sold on balance."

"Interestingly, we are also seeing market participants buying the euro at a modest pace even as our iFlow bond indicators show peripheral eurozone debt remains out of favor."

US markets responded Friday to news that negotiators from the House of Representatives and the Senate had hammered out a consensus on sweeping reform of the US financial system.

While the financial industry fought hard against some of the provisions, banking stocks gained Friday, as investors expressed relief that the bill's language was finally available for parsing.

"It seems that while analysts are still digesting the details of the financial proposal, the market reaction has been favorable," said Nick Bennenbroek of Wells Fargo.

News that some of the toughest proposed provisions, including a ban on proprietary trading, had been watered down, was generally regarded as positive news.

The Commerce Department announced before the market open that it had revised downwards economic growth for the first quarter to 2.7 percent. But the second and final revision of the figure had little effect on investors.

Against other key currencies, the dollar rose to 1.0936 Swiss francs from 1.1023 a day earlier, while the British pound rose to $1.5059 from $1.4926.