Dollar loses safe-haven bid as stocks rally, Ukraine crisis cools
The dollar edged lower against a basket of major currencies on Monday as investors' risk appetite improved amid expectations that Ukraine would receive international aid, calming fears surrounding the heavily-indebted country.
The dollar index was down slightly at 80.218 after posting its first weekly gain in three weeks. Expectations that Ukraine would receive aid from Western donors helped stoke investors' risk appetite.
The greenback also fell sharply against the so-called commodity currencies - the Australian, Canadian and New Zealand dollars. The euro last traded flat near $1.37. The dollar was little changed against the yen above 102.
Investors demonstrated their risk appetite by buying U.S. stocks as well. The benchmark Standard & Poor's 500 stock index climbed to an all-time high earlier on Monday, and was last trading up 1.1 percent.
Despite its broader losses, expectations that U.S. economic data would rebound in the weeks ahead should support the dollar against the euro and yen in upcoming sessions, analysts said. The expectations come after negative surprises on U.S. hiring, retail sales and housing during the past few weeks.
The latest U.S. data released on Monday showed some economic weakness. The National Activity index, a gauge of overall economic activity, fell to -0.39 in January from 0.16 in December while financial data firm Markit's preliminary February reading on the services sector fell from 56.7 to 52.7.
The euro, meanwhile, was pressured earlier on Monday against the dollar after a report heightened expectations of more monetary stimulus from the European Central Bank. ECB Governing Council member Ignazio Visco told news agency Market News International that the ECB is ready to consider cutting its deposit rate into negative territory if needed.
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