The dollar fell near its all-time low on Monday on speculation poor results from major U.S. banks this week will prompt the Federal Reserve to cut interest rates.
Two of Wall Street's largest banks are expected to post multibillion dollar losses this week. Citigroup, which releases results on Tuesday may have lost up to $4 billion in its previous quarter, according to Bloomberg. Merrill Lynch, reporting Thursday, is expected to lose more than $3 billion.
Such results may bode poorly for the dollar raising inflation risks. Last week, Federal Reserve Chairman Ben Bernanke signaled he would take substantive measures to prevent the economy from falling into recession, raising expectations that he would cut the Fed's key overnight lending rate by half a percentage point from 4.25 percent today.
The dollar fell as low as $1.4915 versus the euro, approaching the all-time low of $1.4967 reached on Nov. 23. It was at $1.4866 at 5:21 p.m in New York, from $1.4776 late Friday.
Although a regular meeting of the policy-making Federal Reserve Open Market Committee isn't scheduled this week, unexpectedly poor bank results this week could prompt an emergency meeting.