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The U.S. dollar nursed losses near 2-1/2 month lows on Mond ed currencies, rallying 0.5% to $1.4067 the highest since Feb. 25, despite Scotland’s leader saying another referendum on independence was inevitable after her party’s resounding election victory.

Such a referendum requires the backing of the UK government in London and Prime Minister Boris Johnson has ruled out holding another vote, saying the country faced more pressing challenges such as the recovery from the coronavirus pandemic.

The euro eased 0.1% to $1.2142, earlier touching the highest since Feb. 26 at $1.2177.

“The unexpected slow recovery in the U.S. labour market reinforces the FOMC’s patient approach to monetary policy,” while “the improving global economic outlook is a medium-term weight on the USD,” Commonwealth Bank of Australia (OTC:CMWAY) strategist Kim Mundy wrote in a client note, predicting a break above $1.22 for the euro.

That view was shared by JP Morgan strategists who cut their net long dollar positions against a basket of G10 currencies, notably the euro and the Antipodean currencies. Broader positioning data also revealed a similar trend.

The Aussie dollar traded close to a more-than-two-month high at $0.7847, while Canada’s loonie rallied to a fresh 3-1/2-year high of $1.2111.

In cryptocurrencies, ether ETH=BTSP> extended this month’s record run, surging more than 5% to an unprecedented $4,148.88. The second-biggest digital token has rallied 41% so far in May.

By Saikat Chatterjee

LONDON (Reuters)