Date: Tuesday 10 Jul 2012
The euro recovered against the dollar on Monday, lifting off a two year low, as European Central Bank President Mario Draghi indicated that that the door would be kept open to further interest rate cuts.
Speaking to a European Parliament committee he said that Eurozone leaders had made important progress on reforms to help deal with the crisis but that more work was needed for deeper integration.
The euro bought $1.2312 compared to $1.2278 on Friday and climbed to an intra-day high of $1.2324. However analysts expect gains to be short-lived amid concern about global growth and the ongoing Eurozone crisis.
On Monday softer than expected Chinese inflation data stoked fears that Europe's debt crisis was weighing on global growth. Separate data showed Japan's core machinery orders fell at a record rate in May. That and Friday's weaker than expected US jobs figures are expected to fuel safe haven flows this week.
The dollar index, which measures the US currency against a basket of six others, slipped to 83.165 from 83.359 on Friday.
Against the yen, the dollar fell 0.1% at 79.58 yen, after striking a two-week high last week.
Sterling rose to over a 3-year high against the broadly weaker euro on Monday as investors turned to the pound as safer alternative.
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