The euro tumbled back towards $1.05 on Monday, hitting its weakest in four weeks as the dollar's resurgence continued on bets the US Federal Reserve will raise interest rates from their historic lows in the coming months. The biggest mover among major currencies was the Australian dollar, which shed around 1.7 percent to head towards a six-year low after a shock contraction in Chinese exports stoked worries about sputtering growth in the world's second-largest economy.
The single currency fell as much as 0.8 percent against the dollar to trade at $1.05205, close to a 12-year trough of $1.0457 hit in March, with traders citing both speculators and long-term investors selling. That marked a sixth straight day of losses for the euro - its worst run in more than six months.
The common currency also hit a 2-1/2-month low against the Swiss franc at 1.0368 francs.
Benefiting from gains across the board, the dollar rose 0.6 percent against a basket of major currencies to reach 99.986, its highest in four weeks.
"I think it's more a question of dollar strength today than anything else," said Keng Goh, a currency strategist at RBC Capital Markets in London.
The greenback had fallen as much as 4 percent against its basket from a 12-year high after a much-worse-than-expected US payrolls report earlier in the month threw into doubt a 2015 rate rise. But it has since rallied on upbeat comments from Fed officials and better US data.
Most major banks expect the dollar's strength against the euro to now continue. Morgan Stanley became just the latest to revise down its forecast for the euro on Sunday, predicting the common currency would hit $0.98 by the end of the year.
The Australian dollar, considered a liquid proxy of China plays because of the two countries' trade links, slid to as low as $0.7553, bringing the Aussie back within sight of a six-year low of $0.7534 set earlier in the month. China's 15 percent tumble in exports was the worst in a year.
The World Bank also cut its 2015 growth forecasts for developing East Asia and China on Monday and warned of "significant" risks from global uncertainties."
"All of that provides quite a negative picture for the Aussie, particularly as the data we had overnight was very much driven by a decline in exports, which is going to be seen as quite a negative factor for the region," said Ian Stannard, head of European FX strategy at Morgan Stanley in London.
Sterling ticked down to another five-year low at $1.4567, with just 3-1/2 weeks to go until the most uncertain British parliamentary elections in decades and with weaker-than-expected industrial data last week still weighing.
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