NEW YORK, June 1 (Xinhua) -- The dollar fell against major currencies on Monday as economic data from the United States and China boosted hopes of economic recovery.

    U.S. construction spending rose surprisingly by 0.8 percent in April, the U.S. Commerce Department reported on Monday. It was much better than a loss of 1.2 percent expected by analysts. Public construction spending fell by 0.6 percent, while private spending rose by 1.4 percent. Private spending for residential projects rose by 0.7 percent, the first time since last August.

    The Commerce Department also reported that U.S. consumer spending fell by 0.1 percent in April, slightly better than expectations. Personal income rose by 0.5 percent and savings rate rose to 5.7 percent from 4.5 percent.

    The Institute for Supply Management (ISM) said the ISM index for the U.S. manufacturing sector rose to 42.8 in May, the highest since September. A reading below 50 indicates contraction. The new orders index rose to 51.1, higher than the expansion/contraction threshold of 50 for the first time since November 2007.

    The Purchasing Managers' Index (PMI) of China's manufacturing sector stood at 53.1 in May, the China Federation of Logistics and Purchasing said Monday. Although slightly lower than a month ago, the reading above 50 showed that China's manufacturing sector expanded in May.

    The dollar has been declining against the pound and the euro in the last few weeks, driven by lower safety haven demand and worries over the outlook of U.S. government debt. Some analysts said the government may step in to prevent the greenback from weakening further, since the U.S. sticks to a strong dollar policy.

    The euro bought 1.4171 dollars in late New York trading compared with 1.4132 dollars it bought late Friday. The pound rose to 1.6446 dollars from 1.6140 dollars.

    The dollar fell to 1.0892 Canadian dollars from 1.0938 Canadian dollars, and rose to 1.0703 Swiss francs from 1.0678 Swiss francs. It rose to 96.52 Japanese yen from 95.15 Japanese yen.

Special Report:  Global Financial Crisis