The dollar fell today as worries about a disappointing US recovery and nerves ahead of a key Senate hearing this week drove it down versus the euro, sterling and the Swiss franc.
The dollar fell to its weakest level for nearly four months against the single currency and touched a 5-1/2 month low against the franc and the pound.
Poor US consumer sentiment data on Friday along with the worst week for US equity markets since mid-September dimmed the dollar's attractions and clouded prospects for a strong recovery. "In general the dollar is on the back foot," said Mr David Mann, foreign exchange strategist at Standard Chartered.
"US data is expected to be slightly softer this week, there's a lot of potential for dollar bears to gain pace." He added.
The dollar was holding just above the session's low of $0.9045 per euro, a level last seen in the wake of January's "euphoria" rally when single currency notes and coins were introduced.
The greenback also dipped to 1.6175 Swiss francs earlier in the European session but struggled back to stand at 1.6200, just a third of a per cent down from levels late in New York on Friday.
Against the pound it broke $1.46 and tested lows not seen since early November. But it staged a comeback from a seven-week low of 127.65 yen set at the tail-end of holiday-thinned Asian trade to stabilize around 128.00.
Traders said the key focus this week will be a US Senate banking committee hearing on Wednesday when US treasury secretary Mr Paul O'Neill, defender of the US strong dollar policy, will brief the committee about foreign exchange policy.