Dollar mixed as oil slips, stocks fall

The greenback is mixed as oil prices fall, but the stock market lost ground later in the day.

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NEW YORK (CNNMoney.com) -- The dollar was mixed on Monday as the stock market lost ground, after making gains earlier in the day on falling oil prices.

The euro bought $1.5723 late in the day on Monday, just less than $1.5726 earlier in the day. The dollar bought ¥107.18, just about even with earlier in the day on Monday.

Wall Street ended the day lower on Monday pulling the dollar down slightly, after rallying on falling oil prices earlier in the day. Currency traders look for indicators of the strength of the economy, "and so what better barometer do you have than the equity markets," said Gareth Sylvester, senior currency strategist at HIFX in San Francisco.

"The decline in equity markets off its highs has created a little bit of weakness in the dollar," he said.

After hitting a record last week, crude oil prices fell more than $5 on Monday. Light, sweet crude for August delivery fell $5.71 to $139.58 a barrel at on the New York Mercantile Exchange, giving the dollar confidence, earlier in the day.

Crude oil is traded in US dollars globally, and for months the dollar's weakness has taken some of the blame for surging oil prices.

The currency market is also waiting to hear from the leaders at the G8 Summit. It is "very seldom to we see any direct commentary regarding foreign exchange," said Sylvester. "A potential of hearing a comment from the G8 gives the market some nervousness," he said.

Continuing to react to the ECB. The dollar is also continuing a trend that was started last week, according to Nick Bennenbroek, chief currency strategist at Wells Fargo.

The European Central Bank hiked its key interest rate by 0.25%, which was widely expected. However, the markets had been expecting more hawkish language in the statement (favoring an increase in interest rates) than what was actually said by leaders, weakening the euro.

Bennenbroek says that what happened with the ECB and the euro on Thursday is similar to what happened with the Fed and the dollar June 25th. "Hawkish expectations had been built up moving into these decisions, but then the words that were delivered were somewhat more balanced," he said. Both of "the currencies weakened subsequent to those announcements," he explained.

The US government released its report on unemployment last Thursday as well. The Labor Department reported a net loss of 62,000 jobs in June and as the unemployment rate holds at 5.5%, the outlook on the economy tends to weaken the possibility of any interest rate hikes by the Fed in the future.

While the unemployment report was a negative for the dollar, "when you look at the ECB and what Mr. Trichet said, that was probably much more negative for the euro," said Bennenbroek. In sum, the euro was weakened more than the dollar at the end of last week, and Bennenbroek saw that trend is continuing into the start of this week.