WASHINGTON (dpa-AFX) - The U.S. dollar shed ground against its major rivals on Monday as risk sentiment improved after global stock markets scored strong gains after Chinese stocks rallied on optimism about economic recovery.
Positive euro area economic data too contributed to dollar's weakness.
Chinese stocks rose sharply after state media Securities Times said fostering a 'healthy' bull market after the pandemic is now more important to the economy than ever.
In U.S. economic news, a report from the Institute for Supply Management showed a substantial turnaround in U.S. service sector activity in the month of June.
The ISM said its non-manufacturing index spiked to 57.1 in June from 45.4 in May, with a reading above 50 indicting an increase in service sector activity. Economists had expected the index to climb to 50.1.
The sharp increase by the non-manufacturing index reflected the largest single-month percentage-point increase since its debut in 1997.
The dollar index slid to a low of 96.57 by mid-morning and then recovered to 96.80, but was still well below its previous close of 97.17.
Against the Euro, the dollar weakened to $1.1347 on strong euro area consumer sentiment data. However, it later recovered to $1.1308, cutting down its loss to about 0.52%.
Eurozone investor confidence improved in July, survey results from the behavioral research firm Sentix showed. The investor confidence index improved to -18.2 in July from -24.8 in June.
Retail sales activity also rebounded strongly in the euro area in May, as lockdown restrictions were eased in most countries. Sales in the 19 countries sharing the euro zone rose by 17.8 percent in May from April, Eurostat data showed.
German factory orders advanced 10.4% month-on-month in May, reversing a sharp revised 26.2% fall posted in April, official data revealed. Economists had forecast a monthly growth of 15%.
Against Pound Sterling, the dollar was down marginally at $1.2488 in late afternoon trades, after having drifted down to $1.2534 earlier. A survey showed the U.K. construction industry surged back to growth in June. The closely followed IHS Markit/CIPS construction purchasing managers' index (PMI) surged to a reading of 55.3 last month, from 28.9 in May.
The Yen was stronger at 107.38 a dollar, despite giving up some ground after hitting a high of 107.26.
Against the Aussie, the dollar eased to 0.6974, giving up about 0.5% from Thursday's 0.6939.
Against the Loonie, the dollar was little changed, fetching C$1.3542 compared with C$1.3547 on Thursday. The Swiss franc was hovering around 0.9425 a dollar, up from 0.9458.
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