SAN FRANCISCO (MarketWatch) -- The dollar fell against most major rivals Monday, as Wall Street withered and fears about a global economic slowdown rose.
The dollar index , a measure of the greenback against a trade-weighted basket of six major currencies, was trading at 87.028, down from 87.392 in North American trading late Friday.
"Crude oil, the global growth thermometer, continues to move lower and lower," wrote Jack Crooks, president of Black Swan Capital, an independent currency advisory and trading firm.
"There seems a sinking realization that global recession will continue to get worse before better," he said in a note to clients.
The euro was buying $1.2643, up from $1.2596 late Friday.
The dollar slipped against the yen, which benefits more from risk aversion than other currencies. It was recently trading at 96.35 yen, compared with 97.02 late Friday.
On Wall Street, U.S. stock indexes ended solidly in the red, with the Dow Jones Industrial Average losing more than 200 points. See Market Snapshot.
On the data front, output of the nation's factories, mines and utilities partially rebounded in October from September's sharp weather-related slump, the Federal Reserve reported Monday.
Industrial production increased 1.3% in October after falling a revised 3.7% in September, which was the biggest decline in 60 years.
Despite October's gains, the manufacturing sector is mired in a recession. Industrial production was down 4.1% compared with a year earlier. See Economic Report.
"Signs of stability in the U.S. manufacturing sector have failed to turn around the market's risk appetite," Kathy Lien, director of currency research at GFT, said in a note.
"Although the U.S. dollar has weakened marginally against all of the major currencies, if U.S. stocks continue to sell off, we could see the dollar regain strength," Lien said.
December crude fell $2.09, or 3.7%, to close at a 22-month low of $54.95 per barrel Monday on the New York Mercantile Exchange, with prices reflecting weakness in the U.S stock market and ongoing concerns about global energy demand. See Futures Movers.
G20 meeting
A weekend meeting of leaders from the world's top developed and emerging economies ended up having little impact on currency markets Monday, strategists said.
Fears over the depth of a global economic slowdown and ongoing uncertainty over the financial sector continued to hang over equity markets and weigh down risk appetite in the wake of the weekend summit of leaders from the Group of 20 nations.
At the summit, leaders agreed to take "whatever further actions are necessary" to stabilize markets, while opening the door to broader regulation of the financial sector. See full story.
In the end, markets viewed the meeting as "long on rhetoric and short on substance," said Daragh Maher, currency strategist at Calyon Bank.
But there was little expectation that the meeting would produce any dramatic, instant solution to economic and financial woes, he said.
