The dollar fell against the euro on Monday after Bank of America reported a bigger than expected plunge in profit and a European Central Banker dashed hopes for a euro interest rate cut soon.
The U.S. financial sector showed signs of lingering trouble, after the second largest U.S. lender, Bank of America Corp., reported a 77 percent profit decline to $1.21 billion. Analysts had anticipated a smaller drop. Last year the firm earned $5.26 billion in the same quarter. Shares fell nearly 2.5 percent.
Regional U.S. bank National City Corp. reported a quarterly loss and said it would bolster its balance sheet by raising $7 billion.
The euro gained strength against the dollar after hawkish comments by European Central Bank official Klaus Liebscher on the outlook for the euro. He warned that rising inflation in the euro zone leaves no room for ECB interest rate cuts, noting oil price increases are driving up wages.
The dollar fell to $1.5907 at 2:25 p.m. in New York, from $1.5817 last Friday. The Euro rose to 163.92 yen from 163.96. The dollar traded at 103.03 yen from 103.67.