The euro rebounded from a 16-month low against the dollar on Monday as participants pared short positions but remained overwhelmingly bearish ahead of crucial events this week. Recent data showed euro net short positions at their largest ever recorded, making the currency vulnerable to short covering, but further declines are widely anticipated as fears over sovereign funding persists and as the eurozone grapples with a recession that should keep European Central Bank policy accommodative.
The traditional safe-haven Swiss franc, meanwhile, traded slightly higher against the euro after news that Swiss National Bank Chairman Philipp Hildebrand resigned in the wake of a scandal over a controversial currency trade made by his wife just weeks before he set a cap on the country's soaring currency.
In early New York trade the euro was 0.1 percent lower at 1.2134 francs. Against the dollar, the euro was 0.4 percent higher at $1.2764 after hitting its lowest level since September 2010 of $1.2666 on trading platform EBS in thin Asian trade. Tokyo markets are closed for a public holiday. Against the yen, the euro had hit an 11-year low of 97.25 yen. The dollar held steady against the yen at 76.82 yen, staying above a two-month low of 76.30 yen hit last week.