Investing.com - The dollar slid lower against a basket of other major currencies on Monday as trade volumes remained light with U.S. markets closed for the Memorial Day holiday and financial markets in the U.K. also shut for a public holiday.
EUR/USD was up 0.17% to 1.3653 after falling to lows of 1.3615 earlier in the session, the weakest level since February 13.
The euro fell to three month lows against the dollar earlier Monday after anti-European Union and far-right parties performed strongly in European Parliament elections in some countries over the weekend.
The euro later firmed up as the election results in Greece and Italy were not seen as a threat to the stability of either government.
The pair showed little reaction after European Central Bank President Mario Draghi said Monday the bank saw a risk of a deflationary cycle taking hold in the euro zone, the latest indication that it could ease monetary policy at its upcoming meeting next week.
"What we need to be particularly watchful for at the moment is the potential for a negative spiral to take hold between low inflation, falling inflation expectations and credit, in particular in stressed countries," Draghi said.
The euro has weakened broadly against the other major currencies, falling more than 2% against the dollar since the ECB indicated at its May 8 meeting that it is comfortable with easing monetary policy as soon as its next meeting in June.
Elsewhere, USD/JPY slid 0.12% to 101.84, while USD/CHF was down 0.15% to 0.8940.
The pound inched higher, with GBP/USD easing up 0.12% to 1.6847. Demand for sterling continued to be underpinned after Bank of England Deputy Governor Charles Bean said Saturday that U.K. interest rates could start rising before next spring.
AUD/USD rose 0.18% to 0.9247, while NZD/USD was almost unchanged at 0.8554 and USD/CAD was at 1.0858.
The US Dollar Index, which tracks the performance of the greenback versus a basket of six other major currencies, slid 0.15% to 80.31.
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