The dollar eased down slightly against the euro this morning with investors waiting for the first significant US economic data of this week.
In mid-morning trade Europe, the euro was at $1.2102 against the dollar, having moved higher throughout Asian trade from $1.205.
Strategists said the dollar's strong rally of the previous days - the euro has fallen from $1.237 last Friday to $1.205 today - was due to position-squaring after a build-up of short-dollar trades.
Market participants said trade was thin as investors waited for US durable goods data for July to gauge the extent of the soft patch in the economy over June and July. Orders are expected to have risen about 1.3 per cent excluding auto sales, following a 0.4 per cent drop in June.
Later in the week, the first revision to second-quarter US GDP will attract attention on Friday, as will a speech by Mr Alan Greenspan, chairman of the Federal Reserve, at a Fed syposium shortly after the data are released.
Earlier this week, two Fed officials stressed that the "soft patch" in the US economy was temporary, and that they did not expect higher oil prices to have anything more than a small impact on growth.
Oil prices today were steady around $45.35 a barrel, down from record highs of more than $49 a barrel last week.
Agencies