NEW YORK (AFP) — The dollar held near historic lows on the euro and remained in a narrow range overall as traders awaited data that will show if the sputtering US economy is losing more steam or stabilizing.
At 2100 GMT, the single European currency was at 1.5778 dollars after 1.5799 in New York late on Friday.
The dollar was at 99.69 yen, up from 99.16 on Friday.
The euro rose earlier Monday on news that annual inflation in the eurozone had hit a record 3.5 percent in March, suggesting the European Central Bank would not cut interest rates anytime soon.
The ECB has an inflation target of just below 2.0 percent.
"The increasing hawkishness of the ECB suggests that these strong inflation numbers will keep the euro supported," BNP Paribas analysts said in a note.
Dealers said that markets were now waiting for a series of important US economic data this week, including a key employment report on Friday.
A report on Tuesday by the Institute of Supply Management on the factory sector will show whether activity in manufacturing is contracting or expanding. The past month's index showed a steeper-than-expected decline.
The most crucial data however is Friday's report on nonfarm payrolls, since job creation is seen as one of the best indicators of economic momentum.
Terri Belkas at Forex Capital Management said these two reports, if weak, could determine the Federal Reserve's next move on interest rates. The Fed has already slashed rates by three percentage points since September in an effort to ease housing and credit market stress.
"If we see that the manufacturing sector report on Tuesday and other data, including (non-farm payrolls), add to the pile of evidence pointing toward a US recession, futures markets may shift quickly to fully price in a 50-basis-point cut to the fed funds rates on April 30," Belkas said.
Plans announced by US Treasury Secretary Henry Paulson to give sweeping new oversight powers to the Federal Reserve, including tighter surveillance of financial markets, had no immediate impact on the forex markets.
In late New York trade, the dollar stood at 0.9930 Swiss francs after 0.9948 Friday.
The pound was at 1.9829 dollars from 1.9948.
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