NEW YORK: The dollar drifted slightly lower against the euro while the yen gained in light trade Monday after disappointing Chinese manufacturing data renewed concerns about the ongoing slowdown in China.
British bank HSBC's index on China's manufacturing sector that showed activity contracted for a fourth consecutive month in April, fanning worries that the country's economic slowdown would turn into a hard landing.
"Weak data from China weighed on market sentiment and boosted demand for the safer yen," said Joe Manimbo, senior market analyst at Western Union Business Solutions.
The euro edged higher against the dollar as investors prepared for the European Central Bank's monetary policy meeting.
"There's nothing happening," said Sebastien Galy of Societe Generale in New York. Trade was thin and exchange movements were "most of all for technical reasons" because the financial markets in London were closed for a holiday, he said.
With London the main hub of foreign-exchange trade, "the euro's tiny rise against the dollar" is more an "artistic touch" than any real movement, he added.
Traders appeared to shrug off the escalating crisis in Ukraine, where violence is rising between nationalists and pro-Russian separatists that enjoy Moscow's backing.
"One gets the impression on these markets that traders are used to the negative news and, unless there is a Russian invasion, the market doesn't seem to react," said Nordine Naam, a Natixis currency analyst.
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