LONDON: The euro fell against the dollar and pared its gains against the yen on Monday as some fretted that euro zone inflation data for February could be revised down in its final reading, keeping pressure on the European Central Bank to ease policy more.
The safe-haven yen slipped against the dollar as European stocks edged up on expectations the West will impose only limited sanctions on Russia after Ukraine's Crimea region voted in favour of annexation by Moscow.
Over 95 percent of Crimean voters chose in a referendum to join Russia on Sunday, an outcome that was denounced by Western powers and Kiev as illegal and a sham.
While the risk of flare-ups in tension between Russia and Ukraine is underpinning demand for safe-haven currencies like the yen and the Swiss franc, the market's immediate focus this morning is on final euro zone inflation data due at 1000 GMT.
A Reuters poll forecast no revision to the annual rate of 0.8 percent reported for February, but there is a risk it could be revised down, keeping alive concerns about disinflation in the euro zone.
"Our economists expect that the strong 0.8 percent which the flash estimate produced will be revised downwards to 0.7 percent," said Ulrich Leuchtmann, currency strategist at Commerzbank, Frankfurt.
"This combined with fears that the March result might be even lower is likely to keep alive speculation as to whether the ECB might cut rates once more after all.
The area around $1.3970 will have to constitute a natural barrier.
In the end the risk-reward-ratio is more attractive on the downside."
The euro was down 0.2 percent at $1.3883, off a 2-1/2-year high around $1.3967 touched last Thursday, before European Central Bank President Mario Draghi knocked it lower when he voiced concerns about its strength.
Against the yen, the euro was flat at 140.98 yen off a session high of 141.34 yen struck in Asia.
It remained well shy of its March 7 high of 143.79 yen, which was its highest since Jan. 2.
<Center><b><i>Copyright Reuters, 2013</b></i><br></center>*
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