Dollar plays waiting game ahead of data

The dollar remained on the back foot near the previous day's two-week lows versus the euro and the yen this morning.

The dollar remained on the back foot near the previous day's two-week lows versus the euro and the yen this morning.

It was kept in check by mixed US stocks and concerns upcoming data may signal a sluggish US recovery.

Japanese economic data that hit the market in Asia showed strong exports helped Japan's growth in the April-June quarter but reinforced the view the country's economic recovery is fragile.

Attention was now fixing on the Chicago Purchasing Managers' index, a key gauge of manufacturing activity in the Midwest, due at 10 a.m. EDT, after conflicting US data on jobs, consumer sentiment and manufacturing this week.

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By 6 a.m. EDT the dollar stood at $0.9852 per euro, near two-week lows set yesterday. The dollar has been stuck in a tight $0.96-$0.99 range for almost all of this month.

Things were equally unexciting for the dollar against the yen, with the greenback staying close to the previous day's 1-1/2 week low below 118 yen.

Denmark provided a momentary flutter when its central bank lowered its key short-term interest rates by five basis points to 3.45 percent to curb crown strength.

Earlier in the session, the crown had hit a record high at 7.4242 per euro, driven up in recent weeks partly by inflows into higher-yielding bonds, traders said.

US markets are due to shut early at 2 p.m. EDT ahead of Monday's Labor Day holiday. Before they do however, the Chicago PMI index is expected to rise to 52.0 in August from 51.5 in July.