LONDON - The dollar steadied against the euro and the yen on Monday, ahead of a quiet week for US data and a speech from Federal Reserve chairman Alan Greenspan that could shed light on US interest rates.
The euro fell to 1.2887 dollars from 1.2905 late on Friday in New York.
The dollar firmed to 107.91 yen from 107.56 on Friday.
"There is far less on the data front to focus on and markets may well carry forward the positive dollar momentum over coming days," said CALYON analyst Mitul Kotecha.
The dollar continued to gain ground after shrugging off news of weak job creation and soft manufacturing activity in the United States to move higher Friday.
The US unit's rise came "despite the below consensus gain in non-farm payrolls on Friday", said Bank of Tokyo-Mitsubishi economist Derek Halpenny.
The labour report disappointed, with non-farm payrolls rising just 110,000, roughly half market expectations of a 220,000 increase.
"The disappointing gain ... was offset by a 0.2 point drop in the unemployment rate from 5.4 percent to 5.2 percent and by a 0.3 percent gain in average earnings," Halpenny added.
"These elements helped ensure that the market's focus remained on the threat of inflation, the main market concern since the (Fed) statement following its last meeting on March 22", at which the central bank lifted rates to 2.75 percent.
That set the stage for Fed chief Alan Greenspan's speech later this week.
"It will be interesting to see which spin the Fed will give to the disappointing US labour market report although speculation about accelerating Fed rate hikes should ease for the time being," said Michael Klawitter at West LB.
Elsewhere, Japan said Monday it would diversify its huge foreign reserves, mostly in dollars, into assets other than US treasury bonds but would not shift funds into instruments in other currencies.
Japan, which holds the world's largest reserves worth 840 billion dollars (652 billion euros), wants to send a message that it has no plans to sell off dollar assets in a portfolio shuffle, a finance ministry official said.
"We have no plans to change the breakdown of our holdings, which are dominantly in dollars," the ministry official said.
The euro was changing hands at 1.2887 dollars against 1.2905 late on Friday in New York, 139.05 yen (138.85), 0.6878 pounds (0.6861) and 1.5531 Swiss francs (1.5528).
The dollar stood at 107.91 yen (107.56) and 1.2052 Swiss francs (1.2030).
The pound was being traded at 1.8737 dollars (1.8804), 202.21 yen (202.27) and 2.2581 Swiss francs (2.2622).
On the London Bullion Market, the price of an ounce of gold stood at 426.00 dollars against 427.15 dollars late on Friday.
04/04/2005 11:03 GMT