Investing.com

Investing.com - A dearth of official data saw currencies trade flat in early Asia on Monday though events in Iraq and ongoing questions over easy global monetary policies provide ample scope for volatility.



AUD/USD traded at 0.9425, up 0.01%, while USD/JPY edged to 101.90, down 0.03%, and EUR/USD held at 1.3602, down 0.01%.



Overnight, the dollar slipped against most major currencies on Monday as the euro recovered from soft European output data, while the escalating Iraqi insurgency offset positive U.S. housing data.



The euro zone’s composite index of service and manufacturing sector activity fell to a six-month low of 52.8 in June from 53.5 in May, missing market calls for an unchanged reading, according to London-based Markit Economics.



The numbers softened the euro, though bargain hunters sent the currency back up.



European Central Bank President Mario Draghi said over the weekend that interest rates would stay low over a longer period. He added that large-scale asset purchases are still part of the central bank''s toolkit though monetary authorities would need to see inflation expectations deteriorate rolling out fresh quantitative easing programs.



Meanwhile, the dollar rose earlier on upbeat U.S. housing-sector data.



The National Association of Realtors reported earlier that existing home sales hit 4.89 million in May, up 4.9% from April''s revised 4.66 million rate and above market calls for 4.73 million units.



Elsewhere, Markit Economics reported that U.S. manufacturing PMI rose to 57.5 in June from 56.4 in May, beating market calls for a 56.1 reading.



Geopolitical concerns softened the greenback, however.



A bloody Sunni insurgency in Iraq fueled safe-haven demand for gold, as fears continued to persist the U.S. will become increasingly involved in the conflict, which could threaten recovery.



Gold often sees safe-harbor demand among investors worried over geopolitical issues, and the yellow metal tends to trade inversely from the greenback.



Iraqi Prime Minister Nuri al-Maliki has agreed to a July 1 deadline to create a new government, a step required by Washington if Baghdad receives U.S. assistance in battling the insurgents.



The US Dollar Index, which tracks the performance of the greenback versus a basket of six other major currencies, was dflat at 80.35.



On Tuesday, the U.S. is to release private-sector data on consumer confidence, as well as a report on new home sales.





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