NEW YORK, Jan. 10 -- The U.S. dollar fell against major currencies in late New York trading on Monday as the euro rebounded when German and French leaders met to discuss economic issues.

The euro recovered from a 16-month trough against the dollar on Monday as German and French leaders said they had made progress on plans to enact a pact to toughen budget rules across the euro zone.

The shared currency gained 0.6 percent but was still under 1.28 against the dollar on Monday.

On the economic front, Germany reported a 0.6 percent monthly decline in November industrial production after a 0.8 percent rise in October.

Investors now keep a close watch on the European Central Bank's meeting this week.

The Swiss franc was also up on Monday after Swiss National Bank chief Philipp Hildebrand resigned over an escalating controversy over his wife's insider trading.

In late Monday trading, the dollar bought 76.89 Japanese yen, compared with 77.02 from late Friday. The euro rose to 1.2762 dollars from 1.2724.

The British pound also rose to 1.5450 dollars from 1.5426. The dollar fell from 0.9550 Swiss francs to 0.9506, while dropped to 1. 0243 Canadian dollars from 1.0266.