The dollar continued its assault on the euro but came under heavy pressure against the yen on Monday as renewed concerns about the global economy led to another bout of risk aversion. Safety hunters have been switching between the dollar and yen over the past few months, and with the dollar overbought near a 3-month peak, traders are turning to the yen for value.

Stocks hit the skids Monday as traders booked profits from a month-long run to the upside. Also, the Conference Board said that its leading economic indicators index fell by a little more than economists had been anticipating in March, pointing to continued weakness in the US economy.

Across the Atlantic, the European Central Bank is considering additional monetary easing measures to support the economy. Europe will see a gradual recovery in 2010 after experiencing exceptionally challenging situations in the current year, the bank's President Jean-Claude Trichet told the business daily Nikkei in an interview.

Despite calls for the ECB to join other key central banks in lowering the key interest rate to near zero, Trichet said the next rate cut from 1.25 percent would be very measured.

With traders expressing little faith that euro area policy makers have a coherent plan to deal with the economic malaise, the dollar jumped to a 5-week high of 1.2887, extending its strong gains from last week. With the advance, the dollar moved toward a multi-year high of 1.2328, set last autumn.

The dollar also firmed up versus the sterling, paring a good portion of its recent losses. The dollar rose to a 3-week high of 1.4544, up two cents from its overnight levels. Last week, the dollar slipped to 1.5086, its lowest since January.

Meanwhile, the dollar weakened significantly against the yen, slipping to a 3-week low of 97.80. Earlier this month, the dollar hit a 3-month high of 101.48, but has since tailed off.

Monday, the Bank of Japan Governor Masaaki Shirakawa restated that Japan's economic and financial conditions are weakening significantly.

Back in the US, the Conference Board released a report Monday morning showing that its leading economic index fell 0.3 percent in March following a revised 0.2 percent decrease in February. The agency noted that the index has not risen in the past nine months.

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