FX round-up: Dollar's early rally peters out
The dollar staged an early rally on Monday, rising against the yen but later falling against the euro.
The greenback received an early boost following a weekend article in The Wall Street Journal that said the Bush administration was looking at ways to "put a floor under the currency."
Citing an unnamed treasury official, the paper said the US government is making an international effort to stop the dollar's decline. The dollar has suffered a protracted decline in the last year.
Investor focus also turned to a shift in the language at last month's G7 meeting where "concerns over excess volatility in currency markets" were highlighted.
(Article continues below)Advertisement
A recovery on Wall Street Monday also boosted the dollar with investors cheering a reported deal between Hewlett-Packard and Electronic Data Systems for $13bn.
Sterling rose on the back of data showing a record rise in factory gate prices.
Soaring food, fuel and other raw materials costs pushed the price of goods leaving UK factories by record levels last month, casting doubt on the prospect of another interest rate cut soon.
