The euro rose to $1.3297 on Monday morning, up from $1.3242 late Friday. The currency had dropped as low as $ 1.3139 last week in European trading. The dollar moved downward to 104.75 yen, compared with 105.32 on Friday. Last week, the dollar gained about 3 percent against the yen and 1.6 percent against the euro.

Concern over the U.S. trade and budget deficits has powered the euro to a series of new peaks over recent weeks, and the 12-nation currency has shot up from around $1.20 in September. The dollar's retreat came as markets anticipated Tuesday's Federal Reserve policy meeting at which interest rates are expected to be hiked a quarter-point to 2.25 percent.

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