NEW YORK (Reuters) - The dollar fell against the euro and a basket of currencies on Monday after a meeting of Group of Seven finance chiefs reinforced the market's view policy-makers are comfortable with a gradually weakening dollar.
Gains in U.S. stock index futures diminished safe-haven demand, which also pressured the dollar.
The Australian dollar rose as risk appetite improved and speculation mounted that the Reserve Bank of Australia may hike interest rates this week.
Saturday's G7 statement offered nothing new to allay concern over dollar weakness despite heated discussions of the issue in the run-up to the meeting. Traders bet on further dollar declines to help redress imbalances between consumer and indebted countries like the United States and producer and saver nations like China.
"G7 turned out to be all bark, no bite," said Boris Schlossberg, director of currency research at GFT Forex in New York. "The market shook off any fears of verbal intervention and went right back to buying euros and selling dollars."
Global stocks held up Monday despite a weak U.S. employment report on Friday. The weak jobs data suggests U.S. monetary policy will be kept ultra loose, encouraging traders to buy perceived "riskier" currencies and assets like stocks.
"Risk bounced back pretty strongly ... and that's leading to a generally softer dollar today. The market is looking to build up 'risk positions' again," said Geoff Kendrick, currency strategist at UBS in London.
In early New York trading, the euro climbed 0.2 percent to $1.4598.
The market largely ignored a smaller-than-expected slide in euro zone retail sales for August and other data showing the region's services economy returned to growth last month.
The ICE Futures U.S. dollar index .DXY, a measure of the greenback's performance against six major currencies, was down 0.1 percent at 76.961.
CENTRAL BANKS
European Central Bank Governing Council member Ewald Nowotny was quoted on Monday as saying current euro levels posed no big threat and merited scrutiny but no major action.
The euro also took some marginal support from Ireland endorsing the EU's Lisbon treaty in a referendum -- which may smooth decision making in the 27-nation bloc.
The Australian dollar rose 0.9 percent against the dollar to $0.8729, after two influential columnists wrote the RBA would probably raise rates to 3.25 percent from a record low 3.0 percent at Tuesday's policy meeting.
Still, many in the market expect the RBA is more likely to raise the cash rate from 3.0 percent in November.
