The dollar relinquished ground against the majors, slipping to 1.2765 versus the euro and near the 0.65-handle against the Aussie. Crude oil extended

The dollar held its ground on Monday, taking advantage of the ultra-thin volumes owing to U.S. and UK market holidays to arrest its decline of the last three weeks and eke out slender gains against a basket of major currencies.

"This is only due to the iliquid markets," said Carole Laulhere, currency strategist at Societe Generale in Paris.

"The dollar should stay quite vulnerable this week. We still have record oil prices, which is negative for the dollar, and U.S. equity markets are worsening, which is also a concern for the greenback."

Crude oil has soared almost 40 percent so far this year -- over 17 percent in May alone -- to record levels above $135 a barrel . This is fanning fears over the ability of U.S. consumers and businesses to weather the credit- and housing market-led economic storm and prevent the economy from sliding into full-blown recession.

The dollar index hit a one-month low last Thursday, and the S&P 500 equity index posted its biggest one-week decline since early February.

Deteriorating equity markets and rampant oil prices -- which provide the backdrop for the latest euro zone consumer price inflation figures this week -- should be the focus for currency investors this week, Laulhere said.

At 0930 GMT the dollar index was up a slender 0.1 percent on the day at 72.065 <.DXY>, but still within sight of one-month lows of 71.823 struck last week.