The low-yielding euro fell for a second session against the dollar on Monday, as steadier global stock markets prompted investors to seek other currencies that provide better returns.
Wall Street shares and Europe's main bourses were firmer after a poor start to the new year, diminishing the appeal of the euro. Europe's common currency has been used in recent months in carry trades, with investors selling the euro because of its near-zero interest rate and buying other higher-yielding currencies such as the dollar and sterling.
"Modestly improved risk sentiment was enough to cause the euro to lose some ground against the U.S. dollar," said Joe Manimbo, senior market analyst at Western Union Business Solutions in Washington.
But the euro's retreat may be temporary as uncertainty about China and slumping commodities remains on the forefront of investor concerns.