Investing.com - The dollar was higher against the euro on Monday after data on private sector activity in the euro zone indicated that the recovery is losing momentum, while the Canadian dollar rose to fresh multi-month highs.
Data on Monday showed that the euro zone’s composite index of service and manufacturing sector activity fell to a six month low of 52.8 in June from 53.5 in May.
France’s private sector continued to contract this month, dragging on the euro zone as a whole, while Germany's private sector continued to expand this month, but at a slower-than-expected rate.
European Central Bank President Mario Draghi said over the weekend that interest rates would stay low over a longer period and that large-scale asset purchases are still part of the central bank's toolkit.
The ECB cut interest rates to record lows and launched a series of measures to boost lending to companies earlier this month, in a bid to stave off the threat of deflation in the euro area and shore up the recovery.
EUR/USD was down 0.17% to 1.3576 from 1.3606 before the release of the data.
Elsewhere, the dollar was lower against the yen, with USD/JPY down 0.19% to 101.87.
The pound was steady, supported above the 1.70 level by hightened expectations for a U.K. rate hike. GBP/USD was at 1.7016, not far from the highs of 1.7034 reached last Thursday, the most since August 2009.
USD/CHF eased up 0.15% to trade at 0.8962.
The Australian dollar rose to two-month highs following the release of stronger-than-expected factory data from China. AUD/USD was up 0.47% to 0.9433, while NZD/USD added 0.39% to trade at 0.8729.
China’s HSBC manufacturing purchasing managers’ index came in at 50.8 in June, up from a final reading of 49.4 in May. It was the first time the index has risen above the 50 level separating growth from contraction in six months.
The data eased fears over recent signs of a slowdown in the world’s second largest economy.
Meanwhile, the Canadian dollar rose to a fresh five-and-a-half month high, building on Friday’s strong gains. USD/CAD was down 0.24% to 1.0731 after robust consumer price index data on Friday eased concerns over the subdued inflation outlook.
The US Dollar Index, which tracks the performance of the greenback versus a basket of six other major currencies, was little changed for the day at 80.44.