BRUSSELS (Alliance News) - The US dollar erased much of previous session's losses in early New York deals on Monday despite concerns over the pace of the US economic recovery and worries over a slowing Chinese growth.
In economic news, German business confidence strengthened unexpectedly to the highest level since July 2011 as the improvement in the current situation assessment more than offset the fall in expectations.
The business confidence index climbed to 111.3 in February, the highest since July 2011, a monthly survey compiled by the Ifo institute showed today. The survey is based on responses from 7,000 participants.
At the same time, consumer prices in the Eurozone increased at a faster pace in January than estimated earlier, but the rate of inflation remained unchanged from the December level, revised figures released by Eurostat showed today.
The harmonized index of consumer prices (HICP) rose 0.8% year-on-year in January, which was unchanged from the December growth rate. The preliminary estimates were for a 0.7% growth in January.
The core inflation, which excludes energy, food, alcohol and tobacco, rose to 0.8% from 0.7% in December, in line with the initial estimates.
Bank of England Governor Mark Carney rejected the claims by bankers that the new capital requirements proposed by G20 leaders were too strict and could lead to an explosion in shadow banking.
The European Central Bank President Mario Draghi said after the G20 meeting in Sydney he is ready to act if the outlook for prices deteriorates, although he sees no fear of deflation in the euro area.
Political unrest in Ukraine shows signs of settling down for the time being as Ukrainian Defense Minister Pavlo Lebedev has assured his American counterpart Chuck Hagel that his forces would not use arms against the Ukrainian people.
The US dollar rose back above the 0.89 area against the Swiss franc, having improved from Asian session's 2-month low of 0.8854. On the upside, the dollar-franc pair may find target around the 0.8920 level.
The dollar that fell to a 5-day low of 1.3771 against the euro around 4:00 am ET recovered in early New York deals, with the pair settling around the 1.3715 area by 8:30 am ET. If the dollar extends rally, it may find target around the 1.37 level.
The greenback also advanced to 1.6625 against the pound and 102.56 against the yen around 8:35 am ET, having strengthened from previous lows of 1.6679 and 102.16, respectively. If the dollar continue to move in an ascending track, likely resistance levels are seen at 1.66 against the sterling and 102.70 against the yen.
