The dollar fell against other major currencies Tuesday as trading picked up after the Easter holiday. The euro bought $1.2939 in European trading, up from $1.2879 in New York late Monday. The dollar bought 107.08 Japanese yen, down slightly from 107.14 yen, while the British pound advanced to $1.8732 from $1.8652.
The dollar had climbed to five-month highs against the yen Monday in New York amid thin trading. European financial markets were closed Friday and Monday in observance of the Easter holiday. U.S. financial markets were closed Friday.
Worries about the wide U.S. trade and budget deficits sent the euro surging to an all-time high of $1.3667 at the end of December.
While those concerns remain, the dollar has stabilized this year, and it enjoyed a rebound last week after the U.S. Federal Reserve boosted interest rates by a quarter-point and issued a hawkish statement on stronger inflationary pressures.
The Fed is expected to raise rates further throughout the year. Higher U.S. interest rates tend to help the dollar by making assets denominated in the currency more attractive to investors.
In Asian trading Tuesday, Japanese government data that showed unemployment rising to a worse-than-expected 4.7 percent in February and a drop in spending by households headed by wage earners weighed on the yen.