NEW YORK: The US dollar strengthened Tuesday despite the release of glum manufacturing data as traders geared up for the possibility of more easing this week by the European Central Bank.
The euro came off its Monday highs, which were driven by ECB chief Mario Draghi's signal that it would buy short-term debt from struggling eurozone countries, but trading remain tenuous ahead of the ECB's Thursday policy meeting.
At 2100 GMT, the euro was at $1.2564, down from $1.2593 late Monday.
The greenback also rose to 78.40 yen from 78.26 yen, while the euro slipped slightly to 98.51 yen.
"The euro received an early boost after ECB President Draghi reportedly told the EU lawmakers he would be comfortable buying three-year government bonds," said Vassili Serebriakov of Wells Fargo Bank.
"However, the euro has struggled to sustain those initial gains against the backdrop of weaker global equity markets and with Moody's lowering its EU rating outlook to negative."
Sebastien Galy of Societe Generale said that, Europe aside, the dollar's strength was underpinned by much broader worries in the global economy.
"Markets are more worried about China than Europe... The US dollar is rising against Asia," he said.
The British pound slipped to $1.5869 from $1.5886; the dollar edged higher to 0.9558 Swiss francs from 0.9537 francs.
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