By V. Phani Kumar, MarketWatch
HONG KONG (MarketWatch) — The euro on Tuesday struggled to build on the gains made against the U.S. dollar in New York the previous day, as investors looked ahead to a set of likely gloomy economic reports from the common-currency bloc later in the day.
The ICE dollar index DXY -0.14% , which measures the greenback against a basket of six other major currencies, was at 82.400 in Tokyo early afternoon trade from 82.404 late in the North American session Monday.
The euro EURUSD +0.19% went as high as $1.2350 early Tuesday, up from $1.2341 in North American trade, but was unable to go beyond. By midday in East Asia, it was changing hands for $1.2343.
The European currency had gained on the greenback overnight amid optimism the European Central Bank would step in to intervene in the bond markets. It later reversed some of those gains in the wake of reports that another lawsuit was filed in Germany against the legality of the European Stability Mechanism bailout fund.
Expectations for downbeat economic data later Tuesday from the euro zone and its major economies, Germany and France, kept risk appetite in check.
“The releases are likely to make grim reading. ... The numbers matter for global financial markets, though we expect a limited market response today,” Barclays Research economist Paul Robinson wrote in a report.
“In our view, robust growth would be the best thing that could happen to the euro zone in light of its various problems,” he said.
Barclays expects euro-zone gross domestic product to contract 0.2% in the second quarter from the preceding three months, with the German economy growing 0.2% and France’s shrinking 0.1%.
Euro-area industrial production, and France and the U.K.’s inflation reports, are also due Tuesday.
The WSJ dollar index XX:BUXX -0.06% , which measures the greenback against a slightly larger basket than that of the ICE index, edged down to 71.51 from 71.53.
Among other major currencies, the Japanese yen weakened a bit, with the dollar USDJPY +0.32% fetching ¥78.40, up from ¥78.33.
The British pound GBPUSD +0.05% was trading at $1.5689, up slightly from $1.5685, while the Australian dollar AUDUSD +0.01% was little changed at $1.0520, from $1.0521 in New York.
Varahabhotla Phani Kumar is a reporter in MarketWatch's Hong Kong bureau.
