RTTNews - Monday, the U.S. dollar headed south to new multi-month lows against its European, Swiss and UK counterparts as investor risk appetite dampened demand for the safe-haven greenback and boosted higher yielding currencies.

The dollar fell as General Motors is expected file for bankruptcy protection today, which would be the biggest industrial bankruptcy in the history of the U.S., in a deal that will give taxpayers a 60 percent ownership stake and expand the government's reach into big business.

The Obama administration said Sunday that it has deemed GM's reorganization plan viable, and will provide the company $30.1 billion in what is called debtor-in-possession financing - money the company can use while it moves through the bankruptcy process.

The company will also receive some support from the governments of Canada and Ontario, which will lend the firm $9.5 billion.

The dollar fell sharply against other major currencies in the past week as global shares surged up on recovery hopes. But contracting gross domestic product, tumbling business investment spending and homebuilding activity in the U.S. suggested lingering economic weakness and reminded investors that the road to recovery is far from near.

The greenback tumbled to a new multi-month low of 1.4247 against the euro during early deals on Monday. This may be compared to Friday's New York session closing value of 1.4148. On the downside, the next likely target for the greenback is seen around the 1.436 level.

The U.S. currency suffered significant weakness versus the euro in May, falling around 7% despite a series of disappointing news from Europe's largest economy, Germany.

The European Central Bank rate decision is due this week. In May, the ECB has lowered its main refinancing rate to a record low of 1 per cent to boost consumption.

The U.S. dollar slumped to its lowest level since October 2008 against the U.K. currency and hit as low as 1.6434 by 4:15 am ET Monday. At last week's close, the pair was quoted at 1.6190. If the dollar slides further, 1.667 is seen as the next likely target level.

The dollar fell nearly 10 per cent versus the pound in May and tumbled around 3.6% in the previous week on the back of rising U.K. equity markets and encouraging data. The pound is the only currency that has strongly appreciated against the dollar in the past week.

On Friday, the pound spiked higher as U.K. house prices rose unexpectedly in May to record the largest increase since October 2007, hinting that the U.K. economy is on the road to recovery. U.K. house prices rose 1.2% in May from the prior month, reversing a 0.3% decline reported in April

The Bank of England will also meet this Thursday to decide on whether to cut, hold, or raise interest rates further.

Against the yen, the dollar slipped to a 5-day low of 94.47 during today's early trading. The next downside target level for the dollar-yen pair is seen around the 93.8 level. The dollar was worth 95.24 against the yen at Friday's New York session close.

Rising equity markets and signs that the global economy's downtrend is easing, such as a rebound in Japanese industrial production put pressure on the dollar.

Against its Swiss counterpart, the dollar declined to a 6-month low of 1.0621 during Monday's early trading and 1.054 is seen as the next likely target level. At Friday's New York session close, the dollar-franc pair was quoted at 1.0677.

From U.S., the Bureau of Economic Analysis is due to release its personal income & outlays report for April. Economists estimate the report, which is due out at 8:30 am ET, to show that personal income fell 0.2% and the personal spending also declined 0.2% in the month.

Thereafter, the results of the manufacturing survey of the Institute for Supply Management, is due at 10:00 am ET. Economists expect the index to show a reading of 42 for May. the Commerce Department's construction spending report is also scheduled to be released at the same time. The report is expected to show a 1.8% decline in spending for April.

The week's biggest economic news comes on Friday in the form of the U.S. government's monthly jobs report for May. Nonfarm payrolls are expected to drop by 550,000 after slipping 539,000 the month before.

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