The dollar was slightly higher on Monday, supported as investors shied away from taking new positions before key U.S. jobs data due this week, while gains were kept in check as rising stocks stoked slight demand for risk.

The dollar extended losses against the euro on Tuesday as the market awaited the outcome of a U.S. Federal Reserve policy meeting on Wednesday and a record $104 billion in U.S. debt issuance this week.

Gold steadied today as the dollar index reversed earlier losses, but trading was muted as the U.S. currency remained hemmed into ranges ahead of a Federal Reserve meeting next week.

The US stock market is enjoying one of those delightful episodes when all news is good news. The Dow Jones Industrial Average jumped 221 points yesterday to 8,721 – lifting the Blue Chip index to within a whisker of a positive year-to-date performance.

After last week’s thumping at the hand of all its major counterparts, the dollar is looking to me like Charles Atlas’ 98-pound weakling from the old comic book ads. Sand is getting kicked in its face from every bully on the beach. Even the lowly yen, with its pacesetting negative GDP (a negative 250% of the United States), is kicking the dollar’s bootie.

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World stocks took yet more losses Tuesday, with Europe shares hitting a record low, a day after most equity markets suffered a thorough battering at the hands of investors fearful for the global financial system.