TOKYO, Japan -- The dollar rose to a six-month high against the euro on Monday, extending its gains from last week as worries about the euro zone economy stalling and a drop in oil prices bolstered investor confidence in the US currency.

The dollar was also near a seven-month high against a basket of six major currencies, as investors see growing signs of economic deterioration accelerating in other regions while the US economic slowdown may be moderating.

The focus is now on when expectations will rise for the European Central Bank to cut interest rates, as the market is now betting that central banks in Australia and Britain will do in the coming months.

Last week's data showed the euro zone gross domestic product contracted in the second quarter for the first time ever.

In contrast, the Federal Reserve was expected to keep US interest rates on hold for a while, after slashing them over the past year.

"Investors are gradually recovering confidence in the dollar, and the main driver is a drop in oil and other commodities prices on growing concerns about demand, not only from the industrialized nations but also from emerging countries," said a senior dealer at a European bank.

"The euro and commodities markets have seen their rally peak, so I expect the dollar to keep a firm tone for a while," he said.

The euro fell to a six-month low of $1.4645 on trading platform EBS in early Asian trade Monday, before recovering to $1.4706, up 0.1 percent from late Friday US trade. The dollar has gained about 6.0 percent against the euro this month.

The dollar index, which measures the dollar's value against a basket of six currencies, hovered near a seven-month high of 77.268 struck on Friday. It last traded at 77.122.

Oil prices fell below $114 a barrel Friday after touching a three-month low of $111.34. A steep fall in oil and other commodity prices had reinforced the dollar's recent sharp rebound.

The dollar rose to its highest level against the yen since early January on Friday, hitting 110.67 yen. It was down 0.4 percent to 110.10 yen on Monday.

The dollar's gains may be limited against the yen, which could continue to draw support from Japanese retail traders cutting big positions in the Australian and New Zealand dollars as they try to limit losses from the sharp slide in those currencies over the past few weeks.

The yen has jumped against high-yielding Aussie and New Zealand dollar on growing expectations that the central banks in these countries will lower interest rates in the coming months.

The yen has a bigger scope for a rise against the euro, as expectations for a rate hike had been greater than for other currencies, the senior dealer at the European bank said.

The euro was down 0.2 percent at 161.95 yen

US data on Friday showed an unexpected rise in manufacturing activity in the New York state area and an increase in industrial output and consumer confidence.

The Reuters/University of Michigan Surveys of Consumers said their index of consumer confidence edged up to 61.7 in early August from 61.2 in late July.

US industrial production edged up 0.2 percent in July and a gauge of manufacturing in New York state rose more that expected in August.