* Dollar falls on continued worries about U.S. financials

* Sentiment toward dollar remains cautious

* Investors watching U.S. earnings, oil prices (Recasts; adds comments, changes byline)

By Vivianne Rodrigues

NEW YORK, July 21 (Reuters) - The dollar fell on Monday as fears of woes in the U.S. financial sector persisted even as Bank of America (BAC.N: Quote, Profile, Research) reported better-than-expected results.

The greenback gained earlier against the yen after Bank of America's second-quarter earnings beat analysts' forecast. But investors remained wary ahead of a flurry of bank earnings due this week, including Wachovia WB.N on Tuesday.

The market also focused on a rescue plan for troubled U.S. mortgage finance giants Fannie Mae (FNM.N: Quote, Profile, Research) and Freddie Mac (FRE.N: Quote, Profile, Research).

"There was a lack of follow-through buying in the dollar after the Bank of America results," said Steven Butler, director of foreign exchange trading at Scotia Capital in Toronto.

"The bank's results were less worse, but concerns in the financial sector remain," he said.