The U.S. dollar rose against a basket of major currencies on Monday on renewed risk appetite in the wake of a disappointing U.S. jobs report that suggested the Federal Reserve would hold off on raising interest rates for longer.
Data on Friday showing a stumble in U.S. jobs growth has led traders to expect that the Fed will delay its first rate hike since 2006 to early next year. That view boosted risk appetite and put selling pressure on the euro, yen, and Swiss franc, which traders view as safer funding currencies given their low yields.
A U.S. rate hike is expected to boost the dollar by driving investment flows into the United States. While the dollar has previously weakened on expectations for later Fed rate hikes, the greater risk appetite took precedence on Monday.
"The risk appetite flows are trumping any disappointment on the interest rate front," said Boris Schlossberg, managing director at BK Asset Management in New York.
The U.S. dollar index, which measures the greenback against a basket of six major currencies, was last up 0.26 percent at 96.081, marking a recovery from a nearly two-week low of 95.218 hit Friday. The dollar also hit a one-week high against the yen of 120.550 yen.