Dollar eases against rivals

NEW YORK (CNNMoney.com) -- Following last week's run up, the dollar eased back as worries about a global economic slowdown faded.

The dollar index, which measures the greenback against several rival currencies including the euro, the British pound and the Japanese yen, has slipped more than 1% since last week's highs.

The dollar is seen as a low-risk currency and is more attractive during times of economic uncertainty.

"The United States is definitely the weakest link right now in the global growth recovery story, but this week's data has shown some stability," said Boris Scholossberg, director of currency research at GFT Forex. "Unless we see markedly worse results from the U.S. economy, we won't see more risk-aversion flows and the dollar will hold in a tight range."

While the euro is still vulnerable to the underlying fiscal concerns in the region, analysts say the worries that sparked a selloff of the shared currency last week were overblown.

"Greece and Portugal are still problematic, but the core economies in the euro zone are doing considerably better than the market had forecast," Scholossberg said. "That strength will translate to better growth for the region as a whole going forward."

And as long as Europe's recovery is perceived to be stronger relative to that in the United States, investors will make a bet on the euro and against the dollar, Schlossberg said.

The British pound also pushed higher against the dollar, climbing 0.7% Wednesday after the Bank of England's minutes from its most recent policy meeting showed that the British economy is in better-than-expected shape.

The Canadian dollar also rose strongly against the greenback, as investors welcomed a bid for Canadian fertilizer maker Potash Corp. on hopes that an eventual purchase of the commodity producer will boost demand for other Canadian producers.

"This bid has brought Canadian commodities as rich assets to the forefront, which makes the Canadian currency an attractive bet," Schlossberg said.