The dollar traded slightly lower against major rivals on Monday after Federal Reserve Chair Janet Yellen defended the central bank's ultra-loose policy.

Yellen said the Fed's "extraordinary support" for the US economy "is still needed and will be for some time." She added that there was "considerable" progress to be made in the job market and that further monetary stimulus could be effective.

The dollar index, which measures the US currency against six major rivals, fell to 80.112 from 80.171 on Friday. The index firmed 0.4% for the month and 0.1% over the quarter.

Markets also mulled surprisingly weak US manufacturing data. The Chicago purchasing managers' index for manufacturing dropped from 59.8 to 55.9 in March, much weaker than the consensus forecast of a decline to 59.5.

The euro was little changed at $1.3774 after trading at an intra-day low of $1.3721. The initial sell-off came after data showed Eurozone inflation slowed again last month, prompting speculation that the European Central Bank (ECB) will take action against deflationary risks.

For March the euro slipped 0.2% against the dollar but added 0.2% over the last quarter.

Against the yen, the greenback advanced to ¥103.22 from ¥102.81 the previous session. For March the dollar rose 1.4% but declined 2% during the quarter.

The British pound advanced to $1.666 from $1.663 on Friday and logged a quarterly gain of 0.6% but fell 0.5% during March.





CJ

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