Dollar remains broadly supported in quiet trade

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Investing.com - The dollar remained broadly supported against the other major currencies on in quiet trade Monday, still hovering near one year highs against the euro as concerns over the conflict in Ukraine and weak euro zone economic data continued to weigh on the single currency.

Trade volumes were likely to remain limited on Monday, with markets in the U.S. closed for the Labor Day holiday.


EUR/USD hit lows of 1.3119, the weakest level since September 6 2013 and was last trading at 1.3135.

Investors were continuing to monitor the situation in Ukraine ahead of negotiations due to take place later in the day between Ukrainian and Russian officials and pro-Russian separatists after talks last week resulted in no major breakthrough.

Concerns that sanctions against Russia would act as a drag on growth in the euro zone have weighed on the single currency in recent weeks.

Meanwhile, data on Monday confirmed that Germany's economy contracted by 0.2% in the second quarter, in line with forecasts and unchanged from a preliminary estimate.

Separate reports showed that Germany's manufacturing sector expanded at the slowest pace in 11 months in July, while factory activity in France contracted at the quickest pace in 13 months.

Slowing growth in the euro area looked likely to add to pressure on the European Central Bank to implement fresh measures to shore up the faltering recovery in the region, ahead of its upcoming monetary policy meeting on Thursday.

Elsewhere, GBP/USD was up 0.14% to 1.6619 after data showed that activity in the U.K. manufacturing sector expanded at the slowest pace in 14 months in August.

A separate report showed that U.K. mortgage lending rose unexpectedly in July, to hit £2.30 billion from an upwardly revised £2.20 billion the previous month.

The dollar remained near one week highs against the yen, with USD/JPY adding 0.19% to 104.28 and was close to 10-month peaks against the Swiss franc, with USD/CHF up 0.10% to at 0.9192.

AUD/USD was steady at 0.9338, while NZD/USD rose 0.29% to trade at 0.8384.

The commodity linked dollars showed a muted reaction after data earlier Monday showed that factory growth in China slowed last month. China's official manufacturing index ticked down to 51.1 from 51.7 in July, while the HSBC manufacturing index slowed to 50.2 from 50.3 the previous month.

Elsewhere, USD/CAD slipped 0.12% to 1.0864.

The US Dollar Index, which tracks the performance of the greenback versus a basket of six other major currencies, was at 82.76, not far from Friday's 11 month highs of 82.79.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.



This article appears in: Investing , Forex and Currencies

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