* Dollar index struggling at six-week lows
* U.S. data disappoints again, euro zone & Chinese figures
* Sterling hits 4-year peak, euro at three-week highs
By Ian Chua
SYDNEY, Feb 17 The U.S. dollar languished at
six-week lows against a basket of major currencies on Monday,
still struggling to get over yet more disappointing U.S.
economic news that stood in contrast to better data out of the
euro zone and China.
The dollar index traded at 80.100, having slumped to 80.065
-- a low not seen since Jan. 1. Traders said Friday's close
below 80.153, the Jan. 24 trough, could pave the way for further
The euro touched a three-week high of $1.3717, while
sterling scaled a four-year peak of $1.6776.
Data on Friday showed both Germany and France grew slightly
faster than expected in the fourth quarter, pushing the euro
zone's recovery up a gear.
U.S. manufacturing output, by contrast, unexpectedly fell in
January but that outcome was again blamed on bad weather.
The run of soft U.S. data seemed to have affected the
market's expectation regarding the Federal Reserve's tapering
path, analysts at Barclays Capital wrote in a note to clients.
"The market could continue to price in a small possibility
of Fed halting the tapering while the U.S. data remains soft,"
"But we think the Fed will likely look through the near-term
softness in the data and continue to reduce asset purchases by
$10 billion in March, as suggested by Fed Chair Yellen's remarks
during her testimony to the Congress, which should be USD
Latest data showed currency speculators have indeed pared
bets in favour of the U.S. dollar in the week ended Feb. 11.
Still, it was the 15th straight week in which speculators
held net long positions in the greenback, reflecting a wider
belief that the Fed will probably continue to wind back its
extraordinary policy stimulus this year.
Commodity currencies such as the Australian dollar were also
in favour after Chinese lending data on Saturday suggested the
world's second biggest economy may not be cooling as much as
Analysts though warned the data could be distorted by the
Lunar New Year holidays in January. China is the biggest export
market for both Australia and New Zealand.
The Australian dollar hit a fresh one-month high of $0.9070
, before relinquishing a bit of ground to last stand at
It's New Zealand counterpart also scaled a one-month peak of
$0.8396 but quickly retreated to $0.8364 after local
retail sales data missed lofty forecasts.