By William L. Watts, MarketWatch
FRANKFURT (MarketWatch) — The U.S. dollar kicked off the year with mild losses during holiday-thinned volume, though the currency managed to hold gains versus the euro after data indicated manufacturing activity across the shared currency area shrank for a fifth straight month.
The dollar index DXY -0.27% , which tracks the U.S. unit against six other currencies, slipped to 80.178 from 80.289 late Friday.
The euro EURUSD -0.04% , however, lost ground versus the greenback to change hands at $1.2931, down from $1.2996 at the end of the previous week.
A purchasing-managers index for the euro-zone manufacturing sector edged higher in December, final data showed, but remained below the 50 level. That indicates manufacturing activity continued to shrink in December, albeit at a slower pace. Read more: PMI data underline euro-zone recession fears.
The euro/dollar currency pair, which slumped to a 15-month low last week, could go”either way” in the early weeks of 2012 , wrote economists at Jyske Bank in Silkeborg, Denmark.
German Chancellor Angela Merkel and French President Nicolas Sarkozy are expected to meet on Jan. 9, which could offer signs of increased cooperation in the effort to address the euro zone’s debt crisis, they wrote.
The Japanese yen, meanwhile, advanced against the two major rivals, with the dollar USDJPY -0.05% falling to ¥76.94 from ¥76.99, while the euro EURJPY -0.02% dropped below the key ¥100 level to ¥99.41, compared with ¥100.04 Friday.
The British pound GBPUSD -0.19% sat at $1.5484,down from Friday’s $1.5513. The Australian dollar AUDUSD +0.06% was little changed at $1.0221.
The currency moves came as most markets remained closed for the New Year holiday and ahead of key U.S. data due later in the week, including the Institute for Supply Management’s manufacturing index on Tuesday, and the closely watched non-farm payrolls report on Friday. See U.S. week-ahead report.
