Dollar sinks to multimonth lows vs euro, pound

The dollar continued its plunge to multimonth lows against the euro and the pound Monday as better-than-expected readings on manufacturing, consumer spending and construction spending drove investors to riskier assets.
The economic data suggested the economy's decline is moderating, but did not yet show a rebound. Personal spending was down slightly in April, personal incomes were flat and U.S. manufacturing activity contracted for the 16th straight month in May, although at a slower pace.
Hope of an economic recovery has pushed the dollar down as investors trade it in for foreign equities and bonds. Further, continued worries over U.S. deficits and debt loads added to investors' wariness on the greenback.
"There's an ongoing belief that the economy is past its worst point and is set to improve," said David Gilmore of Foreign Exchange Analytics in Essex, Conn. "Risk is back in fashion, and we're seeing money moving from the safety of government paper like the dollar and Treasury bills into things like equities, commodities, emerging markets, real estate - everything that got the snot knocked out of it last year is now being purchased with a vengeance."
The 16-nation euro jumped to $1.4171 from $1.4132 late Friday, earlier trading at a five-month high of $1.4246. Meanwhile, the British pound surged to $1.6446 from $1.6140 and reached $1.6497 earlier in the session, its highest point since November.
Also Monday, General Motors Corp.'s filed for Chapter 11 bankruptcy protection, the fourth-largest in U.S. history. The filing was not shocking, but served as a reminder of the government's heavy involvement in corporate America following last year's market crash and economic tumble.