Dollar nudges 11-year high as euro gives up gains

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The dollar edged up on Monday, with an index that tracks the greenback against major currencies touching an 11-year peak even after soft economic data.

The euro, which is off nearly 10 percent in the last three months, had been up by as much as a third of a percent against the dollar on Monday but surrendered gains and last traded flat at $1.1192.

The yen went through 120 against the dollar for the first time since Feb. 12. The dollar was last up 0.50 percent to 120.09 yen, marking a three-week high for the dollar against the yen.

The dollar index was last up 0.14 percent at 95.427 after earlier going as high as 95.514, its highest since September 2003.

"The dollar's long-term trend is up but it now is in some consolidation," said Paul Christopher, international strategist at Wells Fargo in St Louis. "There is developing expectation Europe and Japan will improve their growth rates this year and that will narrow the lead for the U.S. economy."

The dollar has been steadily rising, largely because America's economic outlook is stronger than those of other big countries and bond buyers expect the Federal Reserve to soon start raising interest rates for the first time since 2006.

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"The sooner they raise rates ... the stronger the dollar will be in the shorter term," Christopher said.

The euro was higher against the dollar briefly on Monday on the back of marginally stronger economic numbers before the start of the European Central Bank's quantitative easing program later this week.

ECB policymakers meet in Cyprus on Wednesday and Thursday, just one of several central bank meetings that will be watched this week in global markets for interest-rate policy shifts. The ECB is expected to lay out more details of the program at a news conference on Thursday.

The euro was bolstered by stronger purchasing manager surveys in Germany and Italy, as well as a slightly smaller fall in an estimate of February inflation, that together signaled that risks of economic stagnation were easing in the euro zone.

The dollar rose in early Asian trading driven by a Chinese rate cut over the weekend and resumed its advance for the day after publication of mixed U.S. manufacturing and construction data.

Personal income rose by 0.3 percent in January though personal consumption fell by 0.2 percent, the U.S. Commerce Department said separately.