NEW YORK, March 13 (Reuters) - The dollar barely clung to gains against the euro in volatile trade on Friday as changing stock market sentiment pushed investors first to buy the greenback as a safe haven, then sell it on higher risk tolerance.
The U.S. currency had earlier erased losses triggered by gains in the stock market following better-than-expected U.S. economic data and signs the U.S. banking sector may be stabilizing.
As stocks came off, the dollar rallied. But as the U.S. session moved closer to the end of the trading day, the dollar again began to struggle.
"The dollar rally here versus the euro is all about stocks. Sentiment has turned in fits and starts," said Brian Dolan, chief currency strategist at Forex.com in Bedminster, New Jersey.
"All that is happening right now is a reality check and investors are asking whether this is really the bottom here. But conviction is really low and that's why we're seeing perpetual setbacks like this," he added.
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