FOREX-Dollar edges higher vs euro on growth outlook
(Recasts, adds quotes, changes dateline and byline)
* Euro edges lower, down 0.1 percent versus dollar
* Firmer oil, ECB inflation comments give euro support
* Dollar may be entering sustained long-term recovery
NEW YORK, Aug 11 (Reuters) - The dollar edged higher versus the euro on Monday as investors assessed how hard the slowdown blighting the U.S. economy would hit the rest of the world.
The euro, which last week suffered its biggest weekly fall since its 1999 inception, fell almost to $1.49 EUR= earlier, although it recouped some of its losses after European Central Bank council member Klaus Liebscher warned that policy-makers remained focused on taming high inflation.
"Growth outside the U.S. is really slowing and hawkish remarks by the ECB at this point won't have the same impact on the euro as they did one or two months ago," said Matthew Strauss, a currency strategist at RBC Capital Markets in Toronto.
Volatile oil prices amid fighting between Russia and Georgia also took some steam out of the dollar, but analysts said there was room for further gains in the dollar.
"There is some resistance in the market to push euro/dollar below 1.50, but if data in the U.S. this week show signs of resilience in the economy, the dollar rally will continue," Strauss said.
He noted that the next key level on euro/dollar was at $1.4928 and a close below that mark could pave the way for further gains in the U.S. currency.
In morning trading in New York, the euro was down 0.1 percent on the day at $1.4989 EUR=, rebounding from the near six-month low of $1.4908 according the EBS platform.
But the dollar index, a measure of the greenback's value against a basket of six currencies, was trading 0.3 percent lower at 75.899 .DXY. The index hit a six-month high of 76.192 earlier on Monday.
ECB President Jean-Claude Trichet's observation last week that the euro zone economy was facing tough times confirmed that the rest of the world is not immune to the economic pain the United States is enduring.
"Even if the U.S. isn't getting better very fast, it was always going to be the case that the underlying problems of Europe were going to be emphasized," said Jeremy Stretch, a markets strategist at Rabobank in London. "The theme has to be that the dollar is winning the least-ugly competition."
Oil prices see-sawed and traded as high as $116.90 a barrel CLc1 earlier on Monday amid heightened tensions between oil-exporting giant Russia and former Soviet state Georgia. Crude last traded at $115.05. Continued...
