The U.S. dollar fell for a second straight session against a basket of major currencies on Monday after traders unwound bullish dollar positions on the likelihood that Federal Reserve policy will be accommodative over the near term.
The dollar added to its losses against the euro following a Fed statement on March 18 that suggested a less aggressive timetable for hiking interest rates. Last week was the dollar's worst week against the currency since late 2011.
"There's a very large long-dollar position in the market, and what we appear to be facing is an unwind of that position," said Richard Cochinos, head of Americas G10 FX strategy at Citi in New York.
He said the weakness in the dollar could persist and that the euro, which rose over 1.3 percent against the greenback to a session high of $1.09692 on Monday, could hit $1.12 by the end of the week. The dollar's weakness against the euro last week came after it hit 12-year highs against the currency.
The euro continued to strengthen against the dollar despite comments from European Central Bank President Mario Draghi on the central bank's bond-buying stimulus plan. The plan has a weakening effect on the euro.