Investing.com - The dollar held onto gains against the other major currencies on Monday, as markets continiued to digest Friday’s U.S. inflation data and as geopolitical tensions between the U.S. and North Korea seemed to die down.
Trading was expected to remain quiet with no major U.S. economic reports set to be released throughout the day.
The greenback had weakened broadly on Friday after the U.S. Commerce Department said consumer prices rose less-than-expected last month. A separate report released a day earlier showed that producer price inflation and its core reading both unexpectedly declined in July.
The weak data was seen as lowering chances that the Federal Reserve will stick to its plans for a third interest rate hike this year.
USD/JPY was up 0.38% at 109.61, off Friday’s two-month low of 108.73, while USD/CHF climbed 0.66% to 0.9680.
Demand for the safe-haven yen and Swissie eased after U.S. Secretary of Defense Jim Mattis and Secretary of State Rex Tillerson both wrote that the U.S. administration would continue to seek diplomatic resolutions with Pyongyang.
In a commentary published in the Wall Street Journal on Sunday, the two men said that "the U.S. has no interest in regime change or accelerated reunification of Korea."
Chinese President Xi Jinping on Saturday called for a peaceful resolution to the North Korean nuclear issue, and urged all sides to avoid words or action that raise tensions.
In Japan, data on Monday showed that the country’s economy grew by 1.0% in the second quarter or 4.0% in annualized terms, which was higher than the 2.5% expected.
Elsewhere, EUR/USD slipped 0.25% to 1.1794, while GBP/USD fell 0.28% to 1.2972.
The single currency came under pressure after data earlier showed that industrial production in the euro zone fell 0.6% in June, more than the expected 0.5% slip.
The Australian and New Zealand dollars remained on the downside, with AUD/USD sliding 0.38% to 0.7872 and with NZD/USD shedding 0.33% to 0.7295.
Earlier Monday, Statistics New Zealand said retail sales increased by 2.0% in the second quarter, beating expectations for a 0.7% rise.
A separate report showed that China’s industrial production rose 6.4% in July, below expectations for an increase of 7.2%.
Fixed asset investment and retail sales also rose less-than-expected last month.
The weak data fueled fresh concerns over a slowdown in the world’s second largest economy. China is Australia’s biggest export partner and New Zealand’s second biggest export partner.
Meanwhile, USD/CAD added 0.12% to 1.2694.
The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was up 0.24% at 93.21, off Friday’s one-week low of 92.83.