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LONDON: The euro rose on Monday but remained within its recent trading range against the dollar before central bank meetings later this month.

Foreign exchange markets were quiet, with the Australian dollar - enjoying a boost from encouraging Chinese economic data - the only real mover.

Euro/dollar has been stuck in a narrow range for several weeks now. Investors expect the Federal Reserve to cut interest rates at the end of this month and the European  Central Bank to follow with more easing in 2019.

The euro was up 0.08% at $1.1282, still within the recent range of $1.14 to $1.11.

And index that tracks the dollar against a basket of six other major currencies was flat at 96.81.

Investors are more bearish on the euro given that Treasury yields look set to remain one of the highest in developed markets despite future Fed rate cuts, analysts say.

However, the euro "should recover somewhat as it looks to me like the eurozone economy and expectations are bottoming," said Marshall Gittler, chief strategist at ACLS Global.

Speculators have added short positions against the dollar in the week to July 9, while more leveraged funds bought dollars, according to U.S. Commodity Futures Trading Commission (CFTC) data. Net long dollar positions rose for the first time in seven weeks, based on calculations by Reuters and CFTC.

Some analysts are surprised that the euro is not gaining as the market prices in Fed easing.

"For the world's most-traded and least-exciting currency pair, a dovish Fed, a weak-dollar President and a hint of global economic optimism, 'ought' to mean EUR/USD rallies. If it can't stage a move back to 1.14 in the next week or two, what on earth could make it rally?" said Kit Juckes, FX strategist at Societe Generale.

Elsewhere, the Australian dollar reached a 10-day high on stronger-than-expected economic data from China, which some analysts saw as signalling that moves to revive spending in the world's second-biggest economy are working.

China's industrial output rebounded in June from a 17-year low in May. June retail sales surged 9.8% from a year earlier.  The Chinese economy grew at the slowest rate in nearly 30 years, though this was expected.

The Aussie gained 0.2% to $0.7035 against the U.S. dollar, its highest since July 4.

China's offshore yuan was up at 6.8740 yuan per dollar .

Sterling was lower by 0.1% at $1.2565 and 89.72 pence against the euro.

The Swiss franc was unchanged at 1.1093 francs per euro,  near a three-week high.

Copyright Reuters, 2019