Dollar Tumbles As Euro Recovers

The U.S. dollar fell against major currencies in late New York trading on Monday as the euro recovered slightly from its losing streak.

The euro rallied to above 1.295 against the dollar in Monday's late trading session, from below 1.29 in earlier trading.

Analysts said the euro's close below its 200-day moving average last week at 1.3075 against the dollar was particularly bearish. Investors were worried that the euro was somewhat oversold after its recent losing streak, and decided to trim their short bet on the euro to reduce risk.

However, there was pressure growing on Portugal from Germany and France to seek financial help from the European Union and the International Monetary Fund to prevent the debt crisis from spreading.

Portugal, Italy and Spain are all due to tap the bond market for funds this week and investors were nervous about whether these highly indebted countries will be able to raise funds at sustainable levels in 2011.

Analysts predicted the next key downside support for the euro lies at 1.2795 against the dollar.

In late Monday trading, the dollar bought 82.81 Japanese yen, compared with 83.03 late Friday, and the euro rose to 1.2954 dollars from 1.2934.

The British pound also rose to 1.5582 dollars from 1.5548. The dollar rose from 0.9658 to 0.9681 against Swiss francs, and also rose to 0.9934 Canadian dollars from 0.9924.