* Freddie Mac, Fannie Mae rescue lifts dollar vs euro

* Concerns about health of U.S. financial sector remain

* Market eyes upcoming Bernanke testimony to Congress (Recasts, updates prices, adds quotes, byline)

By Steven C. Johnson

NEW YORK, July 14 (Reuters) - The dollar rose from a near record low against the euro on Monday after the United States announced an emergency plan to restore confidence in mortgage finance companies Fannie Mae (FNM.N: Quote, Profile, Research) and Freddie Mac (FRE.N: Quote, Profile, Research).

The U.S. Treasury boosted its direct credit lines to the two shareholder-owned but government-sponsored enterprises and said it would buy their shares if asked, while the Federal Reserve made available its direct lending window to financial firms. For details, see [ID:nN13387357].

The plan helped calm market concerns about the health of the U.S. financial and housing sectors, since the two companies fund half of all U.S. mortgages.

By late afternoon, though, the dollar had pared some of its gains, with the euro rising back above $1.59, a cent or so from its lifetime high.

"When Treasury came out with the plan and the Fed backed it up, people were reassured and took the dollar higher," said Mark Frey, head currency trader at Custom House, a global payments dealer in Victoria, British Columbia.