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NEW YORK — The dollar was mixed against major currencies Monday after a report showed a tepid gain in consumer spending.
The news came after world leaders pledged over the weekend to reduce budget deficits by cutting spending and raising taxes. They did so despite warnings from President Barack Obama that scaling back spending too fast could derail the global recovery.
The euro, which is used by 16 European countries, dropped to $1.2287 in late trading in New York from $1.2387 late Friday as investors continued to worry about the continent's economic stability.
The pound rose to $1.5110 from $1.5038, while the dollar was flat at 89.40 Japanese yen and ticked higher against many other, "riskier" currencies.
Over the weekend, leaders from the Group of 20 rich and developing nations pledged to slash budget deficits by half in three years and to stabilize the ratio of debt to gross domestic product by 2016.
Worries about surging public debt levels in Europe have weighed on the euro this year, cutting its value by more than 15 percent against the dollar. Investors drove up borrowing costs for several European countries as fears of default increased, triggering a nearly $1 trillion emergency financing deal from the European Union and the International Monetary Fund.
The summit's deficit-cutting goals could cause economic growth to slow in the near future as governments cut spending, perhaps boosting the safe-haven dollar.
But countries may not follow through on plans, and they do not need to cut their existing stimulus plans to boost the economy.
The U.S. government said consumer spending rose 0.2 percent last month, just above the 0.1 percent growth forecast by economists polled by Thomson Reuters. Personal income rose 0.4 percent.
A bigger jump in income than spending means consumers are choosing to save their money. Weak spending could hamper growth because consumer spending is the biggest driver of the economy.
The dollar slipped to 1.0344 Canadian dollars from 1.0359 Canadian dollars late Friday, and rose versus the Australian and New Zealand dollars, the Scandinavian currencies and the Brazilian real.
The U.S. currency fell to 1.0875 Swiss francs from 1.0939 francs.
