- The dollar was trading close to two-month highs against the euro on Monday, boosted by expectations that the Federal Reserve will continue to unwind its stimulus program, while the Australian dollar pushed higher after data on Chinese fourth quarter growth.

EUR/USD touched lows of 1.3508, the lowest since November 25 and was last up 0.06% to 1.3547.

Demand for the dollar continued to be underpinned after data on Friday showed that U.S. industrial production rose 0.3% in December, rising for the fifth successive month. Another report showed that U.S. building permits rose less-than-expected in December, but remained close to November’s five year highs.

The data reinforced expectations that the U.S. economic recovery is strong enough for the Fed to make further reductions to its asset purchase program at its policy meeting later in the month.

USD/JPY hit lows of 103.87, the weakest since January 14 and was last down 0.14% to 104.17.

Trade volumes were expected to remain thin on Monday, with U.S. markets closed for a holiday.

The dollar slipped lower against the pound, with GBP/USD rising 0.16% to 1.6446, and was steady against the Swiss franc, with USD/CHF dipping 0.02% to 0.9099.

The Australian dollar recovered from three-and-a-half year lows, with AUD/USD rising 0.28% to 0.8804.

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 slipped 0.12% to trade at 0.8247, up from lows of 0.8211.

Elsewhere, USD/CAD was down 0.20% to 1.0940, 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 0.15% to 81.22.

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