- The dollar retreated from two-month highs against the euro in quiet trade on Monday as U.S. markets remained closed for a holiday, while the Australian dollar regained some ground following fourth quarter growth data out of China.

EUR/USD touched lows of 1.3508, the lowest since November 25 before recovering to trade up 0.18% at 1.3562.

The common currency remained under pressure amid concerns that the subdued inflation outlook for the euro zone may prompt the European Central Bank to ease monetary policy further in order to safeguard the fragile recovery in the region.

USD/JPY hit lows of 103.87, the weakest since January 14 and was last down 0.34% to 103.97.

The dollar was little changed against the pound and the Swiss franc, with GBP/USD inching up 0.02% to 1.6424 with USD/CHF dipping 0.08% to 0.9093.

The Australian dollar recovered from three-and-a-half year lows, with AUD/USD rising 0.24% to 0.8801.

The Aussie found support after data on Monday showed that China’s economy grew 7.7% on a year-over-year basis in the fourth quarter, slowing from 7.8% in the previous quarter, but still above the 7.6% forecast by economists.

Meanwhile, NZD/USD inched up 0.05% to trade at 0.8261, up from lows of 0.8211.

Elsewhere, USD/CAD dipped 0.04% to 1.0967, not far from the four year high of 1.0990 struck last Wednesday. The loonie, as the Canadian dollar is also known, remained under pressure amid expectations that the Bank of Canada will stick to its dovish stance on rates at this week’s policy meeting.

The U.S. dollar index, which tracks the performance of the greenback versus a basket of six other major currencies, was down 0.16% to 81.21.

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