LONDON (AFP) --
The dollar dropped against the euro in early European trading on Monday as worries eased over Dubai's debt problems, analysts said.
In London deals, the European single currency rose to 1.4669 dollars from 1.4613 late in New York on Friday.
Against the Japanese currency, the dollar retreated to 88.46 yen from 89.08 yen on Friday.
Dubai said it would pay 4.1 billion dollars to cover Islamic bonds issued by its Nakheel property developer which mature Monday.
"The impact of the news is positive for the euro," Sumitomo Mitsui Banking Corp. trader Satoshi Okagawa told Dow Jones Newswires.
The European currency is seen as a riskier bet than the dollar and the yen and tends to benefit from improved global economic sentiment.
The dollar also declined against the yen, handing back some of its strong gains seen late last week in response to positive US economic data.
The greenback had jumped on Friday as stronger-than-expected reports on US retail sales and consumer confidence boosted the odds that the Federal Reserve would begin the process of lifting interest rates, dealers said.
Dealers said the market was little moved by the results of the Bank of Japan's closely-watched business sentiment survey, which showed firms plan to slash investment, despite a further improvement in business confidence.
"Planned capital spending was weak, offsetting the better-than-expected sentiment among manufacturers," said Societe Generale foreign exchange head Yuji Saito.
Elsewhere on Monday, a Kuwaiti official said that foreign ministers of the Gulf Cooperation Council (GCC) states had reached agreement on a time frame for the planned Gulf single currency.
The foreign ministers ended a meeting early Monday to prepare the agenda for the Gulf annual summit due to start later in the day, where the Gulf monetary union pact is expected to be launched.
The six-nation bloc has been vying to issue the single currency in 2010 but is way behind schedule, having failed to hammer out essential technical convergence preconditions.
In London on Monday, the euro was changing hands at 1.4669 dollars against 1.4613 dollars late on Friday, 129.77 yen (130.34), 0.9031 pounds (0.8985) and 1.5123 Swiss francs (1.5124).
The dollar stood at 88.46 yen (89.08) and 1.0309 Swiss francs (1.0340).
The pound was at 1.6242 dollars (1.6262).
On the London Bullion Market, the price of gold dipped to 1,123.57 dollars an ounce from 1,124 dollars late on Friday.
