LONDON — The euro dipped against its main rivals on Monday as data showed the rate of economic recovery easing across the eurozone. Elsewhere, the yen rose as Japanese leaders avoided measures to tame the currency's ascent.
The Australian dollar meanwhile recovered after falling sharply in early Asian trade on political uncertainty after Australia's weekend general election failed to produce a clear winner.
In morning London trade, the European single currency slid to 1.2712 dollars from 1.2714 dollars in New York late on Friday.
Against the Japanese currency, the dollar dropped to 85.36 yen from 85.63 yen on Friday.
The euro fell as a leading indicator showed the economic recovery in the 16-nation eurozone slightly lost momentum in August, with growth still depending on powerhouses Germany and France.
The purchasing managers' index (PMI), a survey of 4,500 euro area companies compiled by data and research group Markit, fell to 56.1 points from 56.7 points in July, when it had accelerated for the first time in three months.
"The reading was still consistent with a robust rate of expansion and combined manufacturing and service sector output has now risen for 13 consecutive months," Markit said.
Elsewhere, Prime Minister Naoto Kan and Bank of Japan governor Masaaki Shirakawa spoke by phone Monday to discuss the economic impact of a strong yen, officials said, but did not discuss possible intervention.
Markets had anticipated stronger government pressure on the central bank to do more to lift the economy, such as further monetary easing, but no proposals were announced following the conversation.
Instead the yen rose, with the conversation taken as a signal that Tokyo will refrain from monetary easing for now.
"Disappointment spread as the market took the news as a cue to sell shares and buy the yen," said Hirokazu Fujiki, strategist at Okasan Securities.
The safe-haven yen has strengthened beyond levels assumed earlier by many exporters, who stand to lose from its rise.
In London trade on Monday, the euro changed hands at 1.2712 dollars against 1.2714 dollars on Friday, at 108.51 yen (108.85), 0.8159 pounds (0.8182) and 1.3118 Swiss francs (1.3140).
The dollar stood at 85.36 yen (85.63) and 1.0320 Swiss francs (1.0336).
The pound was at 1.5579 dollars (1.5535).~
On the London Bullion Market, the price of gold rose to 1,228.35 dollars an ounce from 1,223.50 dollars an ounce on Friday.
