Investing.com - The dollar was little changed against the other major currencies on Monday, hovering near a three-week high as expectations for June rate hike by the Federal Reserve continued to support demand for the greenback.
USD/JPY declined 0.57% to 109.50, pulling away from Friday’s three-and-a-half week peak of 110.58.
The yen was boosted after data on Monday showed that Japan’s trade surplus for April came in at ¥823.5 billion, far above forecasts for ¥493 billion.
A separate report showed that Japanese factory activity contracted at the fastest pace in over three years in May as new orders fell.
The downbeat data added to pressure on the Bank of Japan to step up measures to spur growth.
The reports came after a meeting of the G7 ended on Saturday with the U.S. reiterating warnings to Tokyo against intervening to weaken the yen.
Meanwhile, the dollar remained supported after the Federal Reserve’s April meeting minutes on Wednesday indicated that interest rates could rise as soon as June.
In addition, New York Federal Reserve President William Dudley said on Thursday that the U.S. economy could be strong enough to warrant a rate hike in June or July.
EUR/USD slipped 0.13% to 1.1209, re-approaching last week’s two-and-a-half month trough of 1.1177.
The euro weakened after the preliminary reading of the euro zone composite purchasing managers’ index, which measures the combined output of both the manufacturing and service sectors, ticked down to a 16-month low of 52.9 from 53.0 in April. Economists had expected the index to rise to 53.2.
The report came after data showed that German private sector activity accelerated for the first time in 2016 in May, despite a slower rise in new business, while French private sector activity grew at the fastest pace in seven months in May.
The dollar was lower against the pound, with GBP/USD up 0.09% at 1.4526 and was higher against the Swiss franc, with USD/CHF adding 0.11% to 0.9912.
The Australian dollar was steady, with AUD/USD at 0.7223, while NZD/USD climbed 0.50% to 0.6789.
Elsewhere, USD/CAD edged up 0.15% to 1.3135, near Friday’s six-week highs of 1.3163.
The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was steady at 95.29, still close to Friday’s three-week highs of 95.51.