The dollar fell on Monday, hitting its lowest in seven weeks on the euro and seven months on the Australian dollar, as investors emboldened by slowing U.S. job losses extended diversification into other currencies. The dollar index .DXY hit a fresh four-month low, following through on a fall on Friday after data showed the U.S. economy shed 539,000 jobs in April, fewer than expected and boosting hopes the worst of the economic slump may be over. Analysts said that with several risk events out of the way, such as stress tests for U.S. banks and the jobs numbers, investors seemed more confident, although it was hard to see what there was in the way of near-term events to keep up that momentum. As a result currencies were expected to look to equity markets for now, though Asian stocks were putting in a mixed performance after gains on Wall Street on Friday and S&P futures SPc1 were down 0.6 percent, indicating a weak U.S. start later. Sharada Selvanathan, currency strategist at BNP Paribas in Hong Kong, said for euro/dollar at least, the shift stemmed more from investors wanting to diversify their holdings as they grew in confidence rather than from any specific euro attraction.

Source