The dollar stood near its lowest level in three months against a resurgent euro, and traders pared earlier bets the Federal Reserve may move soon to taper its stimulus though markets were not fully convinced that higher U.S. inflation is transient. The dollar index, measuring the greenback against a basket of six currencies, was hovering at 90.045 , a tad above a three-month low of 89.646 set on Friday. Minutes from the Fed"s April policy meeting released last week showed a sizable minority of policymakers wanted to discuss tapering bond purchase on worries that pouring more money to an economy on the mend could stoke inflation. Still, Fed Chairman Jerome Powell"s repeated comments that it is not yet time to discuss a reduction in quantitative monetary easing has led many investors to believe it will be months before the central bank actually tweaks policy. "Inflation figures have been pretty strong but retail sales may be starting to slow down. And the economic outlook hinges on fiscal policy, which is still uncertain," said Shinichiro Kadota, senior currency strategist at Barclays. The White House said on Friday it had pared down its infrastructure bill to $1.7 trillion from $2.25 trillion, with cuts to investments in broadband and roads and bridges, but Republicans dismissed the changes as insufficient for a deal. read more With investors pre-occupied with threats of accelerating inflation, U.S. PCE (personal consumption expenditures) data, due on Friday, is seen as one of the biggest tests for markets this week. The euro traded at $1.2179 , flat so far on Monday and off a three-month high of $1.2245 touched on Wednesday. Some analysts said the currency was capped by comments from European Central Bank President Christine Lagarde on Friday that it is still too early for the bank to discuss winding down its 1.85 trillion euro emergency bond purchase scheme. read more Still, the euro and other European currencies have been bolstered by rising optimism about economic reopenings in the region from coronavirus lockdowns. A preliminary purchasing managers" index covering the 19-country euro zone"s dominant service industry, published on Friday, bounced to 55.1 from April"s 50.5, well above expectations and its highest since June 2018. read more "Although the U.S. led in economic reopenings in the first quarter, Europe is catching up and has further room for improvement, supporting the euro," said Jun Arachi, currency strategist at Rakuten Securities. In fact, speculators have been increasing bets against the dollar, preferring other currencies including the euro, in recent weeks. Data from U.S. Commodity Futures Trading Commission released late on Friday showed speculators slightly increased their net short dollar positions in the latest week while raising long positions, both to their highest level since mid-March. The British pound stood at $1.4144 , off Friday"s three-month peak of $1.4233. The yen was little moved at 108.92 per dollar , trapped between a high of 109.785 hit after a strong U.S. inflation data and a low of 108.34 in the wake of soft U.S. payrolls data, both touched earlier this month. In the volatile cryptocurrency market, bitcoin dropped over 7% during the weekend to last trade up 2.4% at $35,528 , having fallen to $31,107 at one point on Sunday. Ether fell to a two-month low of $1,730 on Sunday, down 60% from a record peak hit just 12 days ago, and was fetching $2,178 , up 3.8%. Cryptocurrencies have tumbled after Elon Musk"s Tesla (TSLA.O) said it will stop accepting bitcoin and after China further clampdown on them. read more Our Standards: The Thomson Reuters Trust Principles.