Investing.com - The dollar was trading close to 10-week highs against the euro on Monday and notched up small gains against the yen as unease over turmoil in emerging markets continued to underpin safe haven demand.
EUR/USD inched up 0.07% to 1.3497, after falling to lows of 1.3478 on Friday, the weakest since November 22.
The euro found some support after revised data on Monday showed that the euro zone’s manufacturing purchasing managers’ index rose to a 32-month high of 54.0 in January, slightly higher than the preliminary estimate of 53.9.
The common currency remained under pressure after data last week showing that inflation in the euro zone slowed in January fuelled fears that the European Central Bank may tighten policy to stave off the risk of deflation.
Elsewhere, USD/JPY edged up 0.09% to 102.10. The dollar’s gains looked likely to remain limited as fears over a crisis in emerging markets and concerns over a possible slowdown in China fuelled risk aversion.
Official data released over the weekend showed that China’s manufacturing PMI ticked down to a five month low of 50.5 in January from 51.0 the previous month, in line with market expectations.
A separate report on Monday showed that China’s official services PMI slowed to 53.4 month, from 54.6 in December.
Emerging markets have been hard hit in recent sessions by concerns over the impact of reductions in Federal Reserve stimulus and fears over slowing growth China.
The pound was lower against the dollar, with GBP/USD falling 0.25% to 1.6394 ahead of U.K. data on manufacturing activity due for release later in the session.
The dollar slipped against the Swiss franc, with USD/CHF losing 0.14% to 0.9050.
The New Zealand dollar pushed higher, with NZD/USD up 0.28% to 0.8110.
The Australian dollar also moved higher, with AUD/USD up 0.29% to 0.8776 ahead of the Reserve Bank of Australia’s rate review on Tuesday, amid expectations that it would keep interest rates on hold.
The RBA was expected to shift its stance away from lower rates after recent economic data indicated a pickup in consumer spending and business conditions and continued strengthening in the housing market.
The Canadian dollar pulled away from last week’s four-and-a-half-year lows against the U.S. dollar, with USD/CAD down 0.40% to 1.1081.
The U.S. dollar index, which tracks the performance of the greenback versus a basket of six other major currencies, dipped 0.08% to 81.30.