The euro moved higher on Monday against the U.S. dollar, which pulled off all-time lows at the end of last week thanks to a rally in stocks.

The 15-nation currency bought $1.5835 in morning European trading, up from $1.5805 in New York late Friday but still well short of the all-time high of $1.5982 it reached last Thursday.

The British pound edged up to $1.9957 from $1.9940, while the dollar declined to 103.76 Japanese yen from 104.17 yen.

The dollar has been weighed down by a combination of gloomy U.S. economic data and high European inflation _ fueling expectations that the U.S. Federal Reserve will continue cutting its interest rates, while the European Central Bank will leave the cost of borrowing unchanged at 4 percent.

Lower interest rates can weigh on a nation’s currency as traders transfer funds to countries where they can earn better returns, while higher rates are used to curb inflation.

However, a rally on Wall Street Friday that followed upbeat U.S. earnings data “is being taken by many as a sign that the worst of the credit crunch may now be behind us,” said Gary Thomson, head of sales trading at CMC Markets in London.

That has prompted pressure on the euro; while the European currency has recovered some ground, “the scale of the rally does suggest there’s a degree of conviction amongst traders that the U.S. may be out of the worst,” Thomson said.