The greenback rose broadly on Monday on speculation that global growth may withstand a slowing U.S. economy. The single currency retreated against the dollar from 1.4757 to 1.4658. U.S. currency appreciated from 108.40 to 109.74 versus the Japanese yen and then retreated briefly to around 108.60 on initial weakness in U.S. stocks before rebounding in U.S. afternoon session.

Trichet spoke at a press conference after meeting with colleagues from the Group of 10 nations. He said major central banks were satisfied with joint efforts to tame money market tensions around the turn of the year but will remain in close contact. He said global economic growth was expected to remain quite robust although there were clear downside risks from the market turmoil as well as from high commodity prices.

U.S. Treasury Secretary Henry Paulson said on Monday that despite the housing downturn, the country’s economy will continue to growth. He said the Bush administration is looking at how to strengthen the economy but no decision has been made on using fiscal policy to stimulate growth.

U.S. President Bush said the smartest that can be done is to keep U.S. taxed low and said U.S. economy has strong foundation but cannot take growth for granted and indicated recent economic indicators ‘increasingly mixed’.

The British pound weakened initially to 1.9653, the lowest since August, after British industry reports signaled banks' earnings may be limited and business confidence fell to the lowest in a year, however, the pair rebounded briefly to 1.9757 on short-covering before falling again later in the day on speculation that the central bank will lower its main interest rate a quarter-percentage point to 5.25% by March.

Canadian dollar weakened against U.S. currency as Toronto-Dominion Bank fell to a six-week low on speculation Canada's second-largest bank may write down loans tied to the subprime mortgage market. Although the greenback retreated briefly from 1.0080 to 0.9969, renewed buying lifted the pair in U.S. session and closed at around 1.0058.

The U.S. currency rose against the Swiss francs to 1.1192 as the Sonntag newspaper reported Credit Suisse Group may add 2.5 billion francs ($2.2 billion) to writedowns in the fourth quarter.

Tuesday will see the release of U.K. BRC retail sales, eurozone retail sales, German factory orders and U.S. pending home sales.