The dollar weakened on Monday as traders continued to assess the latest economic news from the U.S.
Friday’s slightly disappointing March jobs report has raised suspicions that the Federal Reserve will keep its ultra-easy monetary policy in place for at least a year.
Meanwhile, an encouraging report on German manufacturing might give euro zone policy makers an excuse not to offer their own stimulus next month.
ECB policymaker Ewald Nowotny hinted as much today, saying that concerns about low inflation are overblown.
The dollar dropped to $1.3750 versus the euro, giving back some of last week’s gains. About a month ago the buck touched a 2 1/2-year low near $1.40 versus the euro.
Germany’s industrial production increased for the fourth consecutive month in February. Factory output was up 0.4 percent.
The dollar rally versus the yen lost steam, with the pair holding at Y103 ahead of tomorrow’s Bank of Japan interest rate decision.
There was little movement near $1.66 versus the sterling, with the buck stuck in a stubborn trading range.
Traders will be looking ahead to Wednesday for the release of minutes from the most recent Federal Reserve meeting.