(Updates to U.S. trading session, adds commentary, byline, previous dateline LONDON)
The U.S. dollar was down slightly on Monday after hitting a 20-year peak last week, with the global economy in focus after the Chinese yuan came under pressure following weak data.
Creating a risk-off mood on Monday, China's retail and factory activity fell sharply in April as extensive COVID-19 lockdowns confined workers and consumers to their homes. . The offshore Chinese yuan CNH=EBS was down against the dollar, holding near a September 2020 low of 6.8380 yuan hit last week.
Following the release of China's data, Bipan Rai, North America head of FX Strategy at CIBC Capital Markets, said trading was focused on macro economic data.
"It's important to highlight that the risks are towards a stronger dollar and primarily, that's because if you look at the macro economic climate, the fundamentals don't look good. From a risk-off perspective that should still support the dollar against most currencies," Rai said.
But he said the greenback was consolidating after its recent strength and that more range-bound trading sessions were possible: "It makes sense for some period of consolidation before the next leg higher."
The euro was pulled from its earlier lows after European Central Bank policymaker Francois Villeroy de Galhau said the common currency's weakness could threaten the ECB's efforts to steer inflation towards its target.
The Australian dollar AUD=D3 , which is highly exposed to the Chinese economy, reversed course as the day wore on and was last up against the dollar after falling as much as 0.9%.
The dollar index =USD was last down 0.11%, after having briefly crossed the 105 level on Friday - its highest level since December 2002, after six successive weeks of gains. Weekly positioning data showed investors built their long dollar bets.
The euro EUR=EBS was marginally higher at $1.0414, but not far from last week's low of $1.0354, its lowest level since early 2017. Analysts see $1.0340 as a crucial level of euro support.
HSBC strategists expect the euro to fall to parity against the dollar in the coming year. "Much weaker growth and much higher inflation leave the ECB facing one of the toughest policy challenges in G10 (central banks)," they said.
Crypto markets, which trade around the clock, had a quiet weekend after turmoil last week driven by TerraUSD, a so-called stablecoin, which broke its dollar peg. An affiliate of the company behind TerraUSD said it had spent the bulk of its reserves trying to defend its dollar peg and would use the remainder to try to compensate some users who had lost out.
Bitcoin BTC=BTSP was last trading at around $29,647, down more than 5%, after having dropped to $25,400 on Thursday, its lowest mark since December 2020.
Currency bid prices at 10:37AM (1437 GMT)
Description RIC Last U.S. Close Pct Change YTD Pct High Bid Low Bid Previous Change Session Dollar index =USD 104.4300 104.5600 -0.11% 9.164% +104.6400 +104.3200 Euro/Dollar EUR=EBS $1.0412 $1.0412 +0.01% -8.40% +$1.0438 +$1.0384 Dollar/Yen JPY=EBS 129.1150 129.2100 -0.07% +12.16% +129.6300 +128.7000 Euro/Yen EURJPY= 134.45 134.48 -0.02% +3.17% +135.0500 +133.7600 Dollar/Swiss CHF=EBS 1.0045 1.0018 +0.24% +10.09% +1.0064 +1.0021 Sterling/Dollar GBP=D3 $1.2259 $1.2258 +0.00% -9.36% +$1.2297 +$1.2217 Dollar/Canadian CAD=D3 1.2899 1.2896 +0.01% +2.00% +1.2981 +1.2887 Aussie/Dollar AUD=D3 $0.6938 $0.6937 +0.01% -4.56% +$0.6960 +$0.6873 Euro/Swiss EURCHF= 1.0457 1.0429 +0.27% +0.85% +1.0489 +1.0417 Euro/Sterling EURGBP= 0.8492 0.8490 +0.04% +1.10% +0.8533 +0.8472 NZ NZD=D3 $0.6286 $0.6290 -0.05% -8.15% +$0.6296 +$0.6229 Dollar/DollarDollar/Norway NOK=D3 9.8165 9.7900 +0.23% +11.39% +9.8390 +9.7760 Euro/Norway EURNOK= 10.2217 10.1592 +0.61% +2.09% +10.2393 +10.1590 Dollar/Sweden SEK= 10.0654 10.0580 +0.09% +11.62% +10.1018 +10.0476 Euro/Sweden EURSEK= 10.4810 10.4755 +0.09% +2.41% +10.5157 +10.4665 <^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^ World FX rates https://tmsnrt.rs/2RBWI5EWeekly FX positions https://tmsnrt.rs/3yBw31e
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