NEW YORK (Dow Jones)--The euro and other higher-yielding currencies gained Monday as U.S. stocks reached fresh 2009 highs and commodities rose.

The euro hovered around $1.50 for most of the day, but failed to sustain a break above the key level as strong demand for a three-year U.S. Treasury auction undergirded the otherwise feeble dollar.

The Dow Jones Industrial Average closed up more than 203 points at 10226.94.

The rally came after the Group of 20 industrialized and developing nations pledged this weekend not to remove economic stimulus programs that have pumped the system with massive amounts of cash that continue to funnel into higher-yielding assets.

Reassurance on continued loose monetary and fiscal policy stemmed concerns over last week's disappointing U.S. monthly employment data.

"Borrowing cheap and investing has become sort of the norm," said Jacob Oubina, currency strategist at Forex.com in Bedminster, N.J.

In late afternoon trading, the euro was at $1.4990 from $1.4844 late Friday, according to EBS via CQG. The dollar was at Y89.99 from Y89.96, while the euro was at Y134.90 from Y133.53. The U.K. pound was at $1.6757 from $1.6608. The dollar was at CHF1.0087 from CHF1.0177.

The Dollar Index, a trade-weighted basket of six currencies, was at 75.088 from 75.784.

To see the euro's move against the dollar, please see:

http://dowjoneswebservices.com/chart/view/2991

Investors got the green light to bulk up on trades considered riskier after currencies weren't mentioned in the official communique of finance ministers and central bankers at the weekend meeting of the G-20 nations. The International Monetary Fund, whose statements didn't mention any concerns about dollar weakness, also supported the move to higher-yielding assets.

"More stimulus is positive for the equity markets, and that in turn helps to lift the euro/dollar and other risk trades," said Kathy Lien, chief strategist at Global Forex Trading in New York. "As long as the G-20 members are not paring back the stimulus, higher-yielding currencies should continue to outperform the dollar."

Weekend comments by U.S. Treasury Secretary Timothy Geithner and U.K. Prime Minister Gordon Brown also warned against ending financial-crisis support programs prematurely.

But keeping a lid on the dollar's losses Monday was the $40 billion, largest-ever auction of three-year Treasury notes, which drew $133 billion of bids and helped push the yield on this latest batch of 2012 debt to 1.404% at the last minute. That was well below the 1.422% quoted in the marketplace just ahead of the auction.

With little global economic data on the calendar for the rest of the week, the euro and other higher-yielding currencies should continue to track stocks, likely leading to an increased pace of dollar losses, analysts said.

The euro should remain on an upward trajectory toward $1.5064; if that level is breached, it may push the common currency to test $1.5285, said Tom Fitzpatrick, chief technical analyst at Citigroup in New York.

Meanwhile, World Bank Chief Economist Justin Yifu Lin staked out a strong position against forcing China to let its currency appreciate as a way to rebalance the world economy, while also warning against other countries devaluing their currencies to prop exports.

"Currency appreciation in China won't help this imbalance and can deter the global recovery," he said in a lecture Monday at Hong Kong University.

In an interview after the lecture, he said other countries shouldn't intervene to keep their currencies cheap to boost their export sectors, calling it the "equivalent of protectionism."

Lin's lecture comes as policymakers, including ECB President Jean-Claude Trichet and officials at the IMF and in Japan, have called for China to let its managed currency, the yuan, appreciate.

China has kept the yuan steady against the dollar since mid-2008.

(Emily Barrett and Fabio Alves in New York, Alex Frangos in Hong Kong, Adam Cohen in Brussels and Paul Hannon in St. Andrews, Scotland, contributed to this article.) link...