FRANKFURT (MarketWatch) — The dollar traded little changed Monday, trimming a loss versus the euro after the 17-nation shared currency reached its strongest level in a month amid hopes for a new aid package for Greece and expectations that the European Central Bank will signal an interest-rate hike later this week. EURUSD 1.4607, -0.0005, -0.0342% 1.501.401.301.201.10 11AOMM The dollar index DXY +0.14% which measures the U.S. unit against a basket of six currencies, stood at 73.771, little changed from 73.775 in late North American trading on Friday. The euro EURUSD -0.0342% traded at $1.4614, down from $1.4626 late Friday. It rose as high as $1.4668 in earlier action, the highest since early May. See real-time currency quotes and tools. Remarks by a German finance ministry spokesman saying it’s not certain there will be a second bailout for Greece contributed to the weaker tone, although rate-hike expectations maintained support for the euro, said Chris Walker, currency strategist at UBS. “One of the key events in the coming week will be the ECB meeting, in our view,” said Barclays Capital strategist Laurent Fransolet in a note to clients Monday. Click to Play European central banks in focus A steady flow of economic news will likely continue to drive European markets this week with the corporate calendar looking quieter. Highlights are likely to include a string of airline traffic updates from the likes of easyJet, Air France and Lufthansa. While he didn’t expect an actual interest-rate hike when it meets Thursday, Fransolet said that the central bank may well flag a 25-basis-point increase for July, and “is likely to send a relatively hawkish message — after all, growth in the euro area has been amongst the most resilient.” In the coming days, he said, investors will see “a further re-widening in the interest-rate differential between euro and U.S. rates, which should be a positive” for the euro’s value against the dollar. The euro was already on the upswing against the greenback at the end of last week, on hopes for a plan to deal with Greece’s debt woes. Disappointing U.S. employment data also weighed on the dollar. Read more on dollar, euro. Overall trading activity was light, with holidays in Asia contributing to thin conditions, analysts said. Against the Japanese currency, the dollar bought 80.04 yen, compared with ¥80.27 late Friday, and the British pound GBPUSD -0.0761% slipped to $1.6407 from $1.6424. The Australian dollar AUDUSD +0.2099% bought $1.0737, unchanged from Friday. Boris Schlossberg, director of currency research at GFT, said the Aussie found solid support earlier in the session as traders speculated the Reserve Bank of Australia could deliver an unexpected quarter-point rate hike at its monthly meeting on Tuesday. But such an outcome looks unlikely, Schlossberg said, amid signs of moderating price pressures and a contraction in job advertisements — a sign the labor market’s beginning to lose steam. “The pair may target the $1.08 level on speculation ahead of the RBA meeting, but if Australian monetary authorities disappoint the market with a relatively cautious outlook on policy, the AUD/USD could tumble sharply in the aftermath of the announcement,” he said, in emailed comments. William L. Watts is a reporter for MarketWatch in London. Lisa Twaronite is MarketWatch's Tokyo bureau chief.

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