NEW YORK: The dollar dipped to one-week lows against a basket of currencies on Monday as stocks hit record highs, and as investors waited on the next catalyst to drive direction.

The dollar has rebounded this year along with rising US Treasury yields as investors bet on faster US economic growth and higher inflation as the economy reopens after COVID-19-related business shutdowns.

The greenback has generally risen at the same time as stocks gain. Investors are now watching to see if that relationship continues as it may indicate a shift in how the currency responds to improving risk appetite.

“The trickiest thing for markets right now is to figure out what the dollar’s sensitivity is to good US economic news,” said Erik Nelson, a macro strategist at Wells Fargo in New York.

The dollar fell on Monday as stocks gained. It was last down 0.20% against a basket of currencies at 92.77. It has fallen from 93.44 on Wednesday, which was the highest since Nov. 5.

Trading volumes were light on Friday, however, with many traders out for the Good Friday holiday. Financial markets in Britain were also closed on Monday.

The euro gained 0.29% to $1.1786. Sterling rose 0.42% to 1.3886. The Australian dollar, which typically rises when risk appetite is strong, gained 0.64% to $0.7639.