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The
euro slipped as low as $1.0957, having traded at $1.0990 in
early London trade, with most investors already positioned for
huge losses in Greek shares.
Losses in the common currency were capped by data showing euro
zone factory activity grew faster than previously thought in
July, with attention now turning to U.S. data.
"The drop in the Greek stock market has put the euro under
slight pressure," said Yujiro Goto, currency strategist at
Nomura. "A lot, though, will be depend on the U.S. data and most
investors want to stay long dollars against the euro."
The greenback took a hit late last week from below-par wage
growth data that clouded the outlook over when U.S. interest
rates are likely to rise.
But analysts said the dollar could draw strength from U.S.
economic indicators this week, including the Institute for
Supply Management's report on U.S. factory activity due Monday
and nonfarm payrolls data on Friday. <ECONUS>
The dollar traded at 97.381 <.DXY> <=USD> against a basket of
six major currencies on Monday, up slightly on the day but well
below a one-week high of 97.773 set last Thursday.
"The dollar is still a better bet than the euro and its
commodity-bloc counterparts," said Jeremy Stretch, head of
currency strategy at CIBC World Markets. "The ISM data and the
non-farm payrolls data could see the impact from the employment
cost index report fade by the end of the week."
The dollar's selloff on Friday could have been worse if not for
hawkish comments from St. Louis Federal Reserve President James
Bullard. Bullard, who has long called for tightening, was quoted
in a Wall Street Journal report as saying the latest U.S. growth
data boosts the case for a hike in September.
His comments helped the dollar pare losses late into the U.S.
session on Friday. Yet U.S. Treasury yields still hovered near
troughs hit on Friday, suggesting some doubts remained about the
timing of a Fed hike.
The dollar was up 0.2 percent against the yen at 124.17 yen.
The Australian dollar was lower at $0.7290, hurt by an official
survey that showed growth at China's big manufacturing companies
unexpectedly stalled in July as demand at home and abroad
weakened. The Aussie is often used as a liquid proxy for China
plays.
(Additional reporting by Masayuki Kitano; Editing by Andrew
Heavens)
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