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Against the euro, it was up as much as half a
percent, taking back some of the past month's hefty losses.
Strategists said country-specific factors allied to rising U.S.
bond yields had helped deepen a correction that started late in
the European afternoon on Friday.
"We're happy because we sold euros on Friday and we think this
move may continue," said Adam Myers, Head of European FX
strategy at Credit Agricole in London.
"Short term, I think we go to $1.1350 today and, if the U.S.
inflation numbers are better than expected at the end of the
week, we could push on to as low as $1.1250."
Before Friday's U.S. data there are final euro zone numbers for
April on Tuesday as investors seek clues to the monetary policy
balance over the next year.
U.S. industrial production fell for a fifth straight month in
April and consumer confidence sagged in early May, quashing any
remaining expectations that the U.S. central bank will begin
raising rates as early as next month and backing the case that
policymakers would hold off until September or December.
"There are a lot of people out there who think the Fed will not
now hike this year. I still think the U.S. data will turn around
and we'll get a move," Myers said.
By 0740 GMT the euro had fallen to $1.1391 <EUR=>, down half a
percent on the day compared to a Friday peak of $1.1468.
"Higher European bond yields have dragged the euro higher, but
from our perspective, it just seems unsustainable," said Mitul
Kotecha, head of currency strategy for Asia-Pacific at Barclays
in Singapore.
Data from the Commodity Futures Trading Commission released on
Friday showed speculators further pared back their bullish
dollar bets in the week ended May 12, pushing net long positions
down for the seventh straight week to their lowest in nine
months.
Against a basket of six major currencies, the dollar added about
0.3 percent to 93.230 <.DXY>, after posting its fifth straight
weekly decline. It had reached 92.133 on Thursday.
News of a capital gains tax on New Zealand property investments
has added to rate-cut speculation there and made the kiwi the
biggest loser among major pairs in recent days. The government
on Sunday said that income gained on residential properties sold
within two years of purchase would be taxed at up to 33 percent.
The kiwi dropped 0.75 percent to $0.7416.
(editing by John Stonestreet)
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