Dollar edges lower ahead of key US economic data

U.S. dollar bills are laid out for a photo.
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The U.S. dollar edged lower against a basket of major currencies on Monday, halting last week's strongest advance since March but still hovering near six-month highs as traders awaited a glut of economic data and policy releases.

The dollar fell slightly against the euro but still traded near eight-month highs against the shared currency ahead of Wednesday's release of U.S. second-quarter gross domestic product growth and a Federal Reserve policy announcement.

Traders also eyed Friday's report of U.S. nonfarm payrolls growth for July.

Traders are watching the Fed closely for hints of a more hawkish monetary policy after a two-day policy meeting ends on Wednesday. Economists forecast U.S. GDP grew 3 percent in the second quarter after a sharp contraction of 2.9 percent in the first quarter, and expect U.S. employers to have added 233,000 jobs in July, according to Reuters polls.


Stronger-than-expected U.S. data on services sector activity on Monday had little impact on major currencies. Financial data firm Markit said its preliminary services Purchasing Managers Index was 61.0 in July, unchanged from June and above expectations for a reading of 59.8.

The National Association of Realtors (NAR) said Monday that contracts to buy previously-owned U.S. homes unexpectedly fell in June. NAR's Pending Home Sales Index, based on contracts signed last month, fell 1.1 percent to 102.7 and confounded economists' expectations for a 0.5 percent gain.

The euro last traded almost 0.1 percent higher against the dollar above $1.34, modestly above an eight-month low touched on Friday. The dollar was last down just below 0.1 percent against the above 101, and was down against the Swiss franc above 0.90 franc.

The U.S. dollar index, which measures the dollar against a basket of six major currencies, was last down under 0.1 percent near 81. U.S. government bond yields stabilized after dropping on Friday, with the benchmark 10-year U.S. Treasury note flat in price to yield 2.47 percent.

—By Reuters