Dollar rises on risk aversion

By Julianne Pepitone CNNMONEY.com

Dollar rises on risk aversion

The dollar gained strength against major rivals Monday, as stocks churned on continued concern about fraud charges brought against Goldman Sachs.
What prices are doing: The dollar gained ground against the euro, rising 0.1% to $1.3487. The greenback rose 0.2% against the British pound, trading at $1.5337.
The dollar was up 0.2% versus the yen at ¥92.37.

What's moving the market: U.S stocks churned monday after the Securities and Exchange Commission on Friday charged Goldman Sachs(GS FORTUNE 500) with drefauting investors.On friday the blue-chip Dow lost 1.1% while the broader S&P 500 plunged 1.6%.

The stock indexes extended losses earlier in the session Monday, sparking a flight to safety. The dollar tends to get a boost when stocks fall, as the dollar is considered a safe haven. Stocks managed to recover later in the day, but the greenback held onto some strength.

What experts are saying: "Friday's movement down in stocks shows we could be in the correction phase of the recent risk rally," said Brian Dolan, chief currency strategist at Forex.com. "That's going to be supportive for the dollar overall."

Dolan noted that stocks fell in early trade Monday despite Citigroup's (C,Fortune 500) report of a better-than-expected 4.4 billion$ quartely profit
"We've had mostly positive data, so stocks had every opportunity to push higher," Dolan said. "But they didn't, and that's a hallmark that the market has run into exhaustion."

In the coming weeks, the euro will hold around $1.33-$1.37, Dolan predicted. If the European currency falls below $1.32, that could push it even lower. Versus the yen, the dollar will trade in a range to ¥91 to ¥93.50, he expects.