The euro recovered against the dollar on Monday after heavy selling last week, but safe-haven currencies won out on overall growth concerns. The premium that investors demand to hold 10-year Irish and Greek government bonds rather than German Bunds widened, while the cost of insuring their debt against default also increased, highlighting investors' concerns about peripheral eurozone economies.
Midway through the New York session, the euro gained 0.7 percent to $1.2839 after climbing as high as $1.2871, recovering from one-month lows hit in Asian trade. The early sell-off in the euro marked the sixth straight day of lower daily troughs for the single currency.
The dollar was down 1.1 percent at 1.0391 Swiss francs after going to its lowest since August 6. The euro was 0.5 percent lower against the franc at 1.3334, having earlier dropped to its lowest since July 8. Traders said funds were lightening positions in euro/Swiss franc with sparse liquidity exacerbating the fall.
The euro gave up early gains against the yen, falling 0.3 percent to 109.54 yen. Though off the session low, it was not far from a one-month trough struck in Asian trade. The dollar was down 1.1 percent at 85.35 yen with investors like hedge funds still preferring to go short on the greenback.
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