The U.S. dollar was little changed against major currencies on Monday, taking a breather from a two-day slide as investors awaited more clues on the policy outlooks for the Federal Reserve and European Central Bank.

The dollar fell Friday as another round of credit market losses prompted investors to reduce exposure to risky assets and heightened concern about the health of the U.S. economy.

The U.S. dollar pulled back from a two-month high against the euro after the European Central Bank left interest rates unchanged and its president's comments focused more on inflation than some had expected.

The dollar gained broadly on Wednesday, supported by hawkish comments from a Federal Reserve official that helped cement views that the U.S. central bank's cycle of aggressive interest rate cuts may be nearing an end.

The dollar extended declines against the euro and a basket of six major currencies for a second day Tuesday after earnings results from Fannie Mae came in weaker than expected.

The U.S. dollar slipped Monday against the euro but edged up against the British pound ahead of European Central Bank and Bank of England meetings later this week.

The dollar climbed to two-month peaks against the yen and a basket of currencies on Friday after a government report showed the U.S. economy shed just 20,000 jobs in April, fewer than economists had expected.

The currency trade has become increasingly popular as stock markets continue to move sideways and safe-haven government-backed bonds offer low yields.

The dollar rose to fresh five-week highs against the euro Thursday after a survey showed a key U.S. manufacturing index for April came in slightly better than expected.

Japan's industrial production fell far more than expected in March, pushing up Japanese bond prices and stoking worries that U.S. economic woes are hitting Japanese companies.

The dollar reversed gains against the euro on Wednesday as traders concluded that the Federal Reserve's statement after its policy meeting left the door open for further interest rates cuts.

The dollar rose to its highest against the euro in nearly a month Tuesday as expectations grew that the Federal Reserve will soon signal the end of its easing campaign, with weak European data denting interest rate sentiment in the region.

The dollar's rally stalled on Monday as investors bought euros to square up positions ahead of a key policy meeting by the U.S. central bank later this week.

Japanese annual inflation hit a decade-high 1.2 percent in March, as energy prices soar, but the central bank is expected to sit tight on interest rates in the face of a soft economic outlook at home and abroad.

The dollar traded at three-week highs against the euro Friday, boosted by a growing view the Federal Reserve may stop cutting interest rates soon.