(Recasts, adds comment, changes byline, dateline; previous
* U.S. nonfarm payrolls Thursday key to dollar outlook
* ECB policy meetings also in focus this week
By Gertrude Chavez-Dreyfuss
NEW YORK, June 30 The dollar slid to a six-week
low against a basket of currencies on Monday as investors grew
cautious ahead of a slew of U.S. economic data this week
following dismal growth figures last Wednesday.
The greenback also dropped to a six-week trough versus the
yen, with market participants caught long dollars last week
ahead of the weak U.S. gross domestic product data. The dollar
fell below its 200-day moving average against the yen for a
second straight session, highlighting weakened sentiment on the
"People are more nervous about the data this week so the
dollar is on the defensive," said Vassili Serebriakov, currency
strategist at BNP Paribas in New York.
Last week's limp U.S. data gave investors little reason to
expect higher U.S. interest rates any time soon.
In contrast, the euro rose to a three-week high against the
dollar, reacting little to Monday's headline euro zone inflation
number of 0.5 percent, with the core rate at 0.8 percent. The
inflation report reinforced the need for the European Central
Bank to run very loose monetary policy but was short of a
reading that would demand more action from a monthly meeting on
Camilla Sutton, chief currency strategist at ScotiaBank in
Toronto said the euro zone inflation number suggested "there are
signs ... of some stabilization in disinflationary pressures and
rising oil prices should keep upward pressure building."
In mid-morning trading, the dollar index was last at
79.896, down 0.2 percent. It hit a six-week low earlier at
79.963. Last week's fall was its biggest in more than two months
and put it on track for a flat half-year.
The dollar also fell to a six-week low versus the yen of
101.21 yen, and was last at 101.41, flat on the day.
The euro, meanwhile, rose to a three-week high of $1.3667
and last changed hands at $1.3663, up 0.1 percent.
Europe's shared currency has been creeping higher since
mid-June, retaking some of the ground lost after the bank took
steps to pump yet more money into the economy a month ago.
All of the broader market and economic trends that have
supported the euro zone common currency this year remain intact
but many analysts are again pointing towards growing momentum in
the U.S. economy which should eventually support the dollar.
This week, all eyes are on U.S. nonfarm payrolls figures,
due a day earlier than usual, on Thursday, and which are
expected to show creation of 210,000 jobs in the past month.
"If we get a strong print, it will be the fifth time in a
row that we have been over 200K," said Peter Kinsella, a
strategist with Germany's Commerzbank in London.
"It should only be a matter of time before the dollar
finally begins to gain some traction."
(Additional reporting by Patrick Graham in London; Editing by