NEW YORK — The dollar dropped against most major currencies Monday as traders shifted into riskier bets including stocks, the euro and currencies linked to commodity exporters.
In late trading in New York, the euro climbed to $1.3404 from $1.3232 late Friday. The British pound rose to $1.5871 from $1.5802 and the dollar fell to 83.34 Japanese yen from 83.90 yen. The dollar fell almost 1 percent against an index of six major currencies.
Investors were relieved that China didn't raise a key interest rate over the weekend. China is trying to rein in bank lending and slow down inflation. China ordered its banks to raise their reserves on Friday, the third increase in the past five weeks.
Higher rates are a tool central banks use to fight inflation. Raising interest rates also tends to curb economic growth, and investors worry that slower growth in China will cut demand for the raw materials and goods China imports.
The euro got a bounce Monday. Europe's shared currency has been dropping since early November on fears that the region's debt crisis would spread.
"Right now the news out of Europe is pretty calm," said Joseph Trevisani, the chief market analyst of online currency broker FXSolutions.