(Recasts with latest market moves, updates prices, adds quote,
changes byline, dateline; previous LONDON)
* Euro gives up Friday's gains
* Investors watching geopolitical developments for cues
* Norwegian inflation surprises, pushing crown almost 1 pct
By Gertrude Chavez-Dreyfuss
NEW YORK, Aug 11 The euro slid against the
dollar on Monday, giving up Friday's gains, hampered by looming
monetary easing from the European Central Bank and worries about
the impact of the Russia-Ukraine conflict on Germany, the euro
zone's largest economy.
Europe's common currency had climbed above $1.34 on Friday
as investors covered overextended short positions but the rally
proved short-lived given the euro zone's fundamental backdrop,
although the euro seemed to have found support at $1.3350.
"The euro remains in a sell-the-rally mode as growth in the
region is threatened by the ongoing conflict with Russia which
is likely to have a particularly negative impact on German
growth," said Boris Schlossberg, managing director of FX
strategy at BK Asset Management in New York.
Germany is Russia's largest trading partner in the European
Union. EU sanctions announced last month restrict the export to
Russia of equipment to modernize the oil industry and prohibit
the sale of machinery, electronics, and other civilian products
that can be used for military or defense purposes.
"This week's ZEW (investor confidence) survey is likely to
highlight the current fears of investors and could push the pair
lower if it misses the already lower expectations," Schlossberg
In mid-morning New York trading, the euro was down 0.2
percent on the day against the dollar at $1.3385. Against
the yen, the euro was 0.1 percent lower at 136.67 yen.
The dollar, meanwhile, was up 0.1 percent against a basket
of currencies at 81.462. It was up as well versus the yen
at 102.09 yen.
The U.S. currency has caught a bid as Treasury yields edged
higher. Higher yields are an indication that a sense of calm has
returned to the market after a relatively quiet weekend in
Ukraine and the Middle East.
"The greenback has now outperformed most rivals for months
as improving U.S. data keep the Federal Reserve on course to
raise borrowing rates next year," said Joe Manimbo, senior
market analyst at Western Union Business Solutions in
The Norwegian crown soared to a seven-week high against the
euro after Norway reported consumer inflation unexpectedly
jumped in July, as investors trimmed expectations the central
bank would cut interest rates.
The crown surged around 1 percent against the euro after the
data amid high volumes, hitting 8.2835 crowns per euro
. That was its strongest since June 19, when the
currency dived after the Norges Bank hinted at a possible rate
cut if the economy weakened.
The euro was down 1.1 percent at 8.2688 crowns.
(Reporting by Gertrude Chavez-Dreyfuss; Editing by James