Investing.com - The dollar traded lower against most major currencies on Monday after soft U.S. home sales numbers prompted investors to lock in gains from the greenback's recent rally and sell for profits.
In U.S. trading on Monday, EUR/USD was up 0.14% at 1.2849.
The dollar recently firmed on expectations for U.S. and other monetary policies to diverge, though by Monday, investors viewed the greenback as in need of a breather, especially after softer-than-expected housing data hit the wire.
The National Association of Realtors reported earlier that existing home sales in the U.S. unexpectedly fell 1.8% to an annual unit rate of 5.05 million in August. Analysts had expected existing home sales to rise 1% to 5.20 million units, and the soft numbers sent investors selling the greenback for profits.
Elsewhere, European Central Bank President Mario Draghi expressed concern about recovery in the euro area though the single currency rose on demand from bargain hunters, as loose monetary policies have already been priced into trading.
In remarks to the economic and monetary affairs committee of the European parliament, Draghi said economic activity in the euro area has slowed and added he saw a risk of a further downturn.
"The economic recovery in the euro area is losing momentum. Following some moderate expansion in recent quarters, growth of the euro area real GDP came to a halt in the second quarter of this year," Draghi said in prepared remarks of his speech.
"The early information on economic conditions which we received over the summer has been somewhat weaker than expected. While industrial production and manufacturing orders in July gave some reason for optimism, more recent survey indicators have given no indication that the sharp decline registered in August has stopped."
He reiterated that the ECB expects inflation to remain at low levels over the coming months before increasing gradually in 2015 and 2016.
Draghi said the ECB remains ready to use additional unconventional instruments within the bank's mandate should it become necessary to further address risks of a prolonged period of low inflation.
Data last week showed that the annual rate of euro area inflation was steady at 0.4% in August, the lowest level in almost five years.
The dollar was down against the yen, with USD/JPY down 0.24% at 108.81, and down against the Swiss franc, with USD/CHF down 0.07% at 0.9402.
The greenback was down against the pound, with GBP/USD up 0.48% at 1.6362.
The dollar was largely higher against its cousins in Canada, Australia and New Zealand, with USD/CAD up 0.74% at 1.1033, AUD/USD down 0.62% at 0.8875 and NZD/USD up 0.05% at 0.8125.
The US Dollar Index, which tracks the performance of the greenback versus a basket of six other major currencies, was down 0.14% at 84.82.