Dollar eases against rivals
Improved economic data and rising stocks undercut the greenback's appeal as a safe haven.
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NEW YORK (CNNMoney.com) -- The dollar slipped against a basket of currencies Monday as signs the U.S. economy is stabilizing bolstered the market's appetite for risk.
The currency was down 0.96% against the euro at $1.3399. It fell 0.55% versus the pound to trade at $1.5003. Against the yen, the dollar fell 0.16% to ¥98.95.
The dollar has been under pressure in recent sessions as better-than-expected readings on housing, manufacturing and consumer spending raised hopes the worst of the economic decline is over.
Monday's data continued that trend.
Pending home sales rose in March for the second consecutive month and were up year over year, according to the National Association of Realtors. Separately, government figures showed construction spending unexpectedly rose in March.
"The dollar is returning to its usual trend of selling off on good data and rising on bad," said Kathy Lien, director of currency research at Global Forex Trading.
The dollar, which is considered a safe haven, often retreats when the economic outlook brightens as investors seek out higher returns in more risky markets.
Stocks rallied, with the Dow Jones industrial average gaining more than 2% on the better-than-expected economic reports.
But the bullish tone could be tempered as investors brace for the release of the government's so-called "bank stress tests," analysts said.
The tests, which were conducted on 19 of the nation's biggest banks, will determine which are healthy enough to withstand another financial shock and which need to raise more capital. The results are expected later this week.
"Rumors over the results of the stress tests are concerning," said Camilla Sutton, currency strategist at Scotia Capital, in a research report. However, "the market has already done a lot to position itself for the potential of bad news," she added.
In addition to the stress tests, the market is concerned about the U.S. government's monthly jobs report due Friday.
The report is expected to show the nation's unemployment rate rose to 8.9% in April from 8.5% the month before, according to a survey of economists by Briefing.com. It is also expected to show the economy lost 620,000 jobs last month, which is 43,000 less than were lost in March.
Meanwhile, gains in the euro and the pound could be limited ahead of a meeting of the European Central Bank Thursday.
The ECB is expected to its key lending rate to 1% and could announce further steps, such as buying securities, to stimulate lending and growth, according to Reuters. 
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