US dollar stuck near 3-month lows; cryptos struggle

London

The US dollar was pinned near three-month lows against a basket of major currencies on Monday, as bets on a robust global economic recovery continued to support currencies seen as riskier.

The dollar index hovered around the 90 mark, down 0.2 per cent on the day and close to a three-month low of 89.646 hit on Friday.

The greenback, seen as a safe-haven trade, has steadily retreated over the past two months as optimism has built about the economic outlook.

European stocks opened up on Monday, closing in on record highs, although several markets, including Germany's, were closed for a holiday.

Currency analysts were already looking ahead to key US personal consumption and inflation figures due on Friday for any warning signs that US inflation could be gathering pace and putting pressure on the Federal Reserve to taper policy.

Traders are also watching for progress on a new stimulus package in the United States, after the White House pared down its infrastructure bill to US$1.7 trillion on Friday but failed to gain Senate Republican backing.

Among the currencies gaining on the US dollar was the euro, up a quarter of a per cent above US$1.22. The single currency has gained around 4 per cent on the greenback over the past three months.

"Although the US led in economic reopenings in the first quarter, Europe is catching up and has further room for improvement, supporting the euro," said Jun Arachi, currency strategist at Rakuten Securities.

In cryptocurrencies, Bitcoin rebounded by 6 per cent to just shy of US$37,000, but is still well down after crashing in recent days, falling as much as 17 per cent to US$31,107 on Sunday.

Bitcoin halved in value just weeks after April's record peak of US$64,895, undermining the case for its mainstream acceptance.

Cryptocurrencies have tumbled after Tesla chief executive officer Elon Musk said it will stop accepting Bitcoin for car purchases and after China further clamped down on them. REUTERS