(RTTNews) - The dollar steadied Monday morning after significant losses in the previous week against the euro, as traders shrugged off another round of encouraging euro zone economic data.
The Federal Reserve meets this week, and is expected to maintain its record low interest rates and quantitative easing program despite evidence the economy is getting back on solid ground.
Powered by Germany, euro zone private sector growth picked up in January, raising the likelihood that the European Central Bank will hike interest rates sooner than forecast in order to combat inflation.
The dollar edged slightly higher to $1.3560 against the euro, having touched a 2-month low of $1.3640 Sunday evening. Earlier in January, the dollar hit a 4-month peak near $1.2875, but has since come under daily pressure.
Driven by both manufacturing and services, euro zone private sector activity rose to a six-month high. The Markit Flash Eurozone composite output index came in at 56.3 in January, up from 55.5 in December.
Eurozone industrial new order growth quickened in November, led by Portugal, Finland and Germany, official figures showed Monday.
Industrial orders rose 2.1% month-on-month in November, after rising 1.4% in October, the European Union Statistical office Eurostat said.
Meanwhile, the dollar was stable near $1.5940 versus the sterling, compared to $1.6010 overnight.
There was little movement against the yen, with the buck hovering near Y83. The buck was just below parity against its Canadian counterpart.
With no major economic data on tap for the day, traders might react to earnings from major corporates including Haliburton (HAL), McDonalds (MCD), American Express (AXP), Crane (CR) and Texas Instruments (TXN) among others slated to release their quarterly report cards.
The S&P Case-Shiller house price index for October, the Federal House Finance Agency's house price index also for October, and the Commerce Department's new home sales report for December will be released this week.
