2018.02.1900:46:00UTC+00Dollar Steady after Sharp Drop, Remains Above 3-Year Lows

The dollar was steady on Monday following last week's sharp fall and managed to remain above a three-year low versus a basket of currencies.

The greenback has been weighed down by several factors this year, including concerns that Washington might pursue a weak dollar strategy and the perceived erosion of its yield advantage as other countries start to scale back easy monetary policy.

The dollar index, which tracks the greenback against a basket of six major rivals, was stable at 89.045 after a bounce on Friday following its drop to 88.253, its weakest since December 2014.

Confidence in the dollar has also been shaken by worries over the U.S. budget deficit which is expected to swell to $1 trillion in 2019 amid a government spending splurge and large corporate tax reductions. The U.S. currency's outlook remained uncertain for the long term.

The dollar was little changed at 106.330 yen after dropping on Friday to 105.545, its lowest since November 2016.

The euro was nearly flat at $1.2423. The single currency jumped to a three-year peak of $1.2556 on Friday before slipping to post a loss of 0.7 percent.

The euro's strength has played a large role in weakening the dollar this year. Focus was on economic indicators due this week, such as Wednesday's eurozone purchasing managers' index and Friday's German gross domestic product numbers, and whether they could drive the common currency higher again.

The pound was slightly higher at $1.4045 after losing 0.5 percent on Friday.

The Australian dollar climbed 0.3 percent to $0.7932 after losing 0.5 percent the previous day.