Dollar clings onto gains as equities prepare for earnings
By Marc Jones
LONDON (Reuters) - The dollar and world shares were losing steam on Monday as the momentum from last week's strong U.S. jobs data faded and attention began to turn to the fast-approaching earnings season.
Weak manufacturing data from Germany took the wind out of European shares and the euro, but for the most part moves were minor and there was little sign of any nervous reaction in the region's bond markets.
The dollar was just about clinging onto a fifth straight day of gains against a basket of other major currencies - its longest streak of gains since October - but a pause in U.S. bond yields left it struggling to maintain its altitude.
"Overall the dollar is a bit stronger and that will remain in place over the next week," said Vasileios Gkionakis, global head of FX strategy at UniCredit in London.
"Rates in the U.S. are going to grind higher, dollar/yen is going to grind higher and probably in the next week or so against the euro as well."
Wall Street was expected to start down 0.1-0.2 percent on reopening after Friday's holiday, according to futures markets. [.N]
After global stocks reached record highs last week, investors are now looking at whether those share prices will be justified by quarterly earnings reports and forecasts in the United States and elsewhere, with aluminium producer Alcoa kicking off the U.S. earnings season on Tuesday.
German industrial output data soured sentiment in European share markets as it fell 1.8 percent on the month in May, its biggest drop in more than two years, confounding expectations of a steady reading from Europe's manufacturing powerhouse. Continued...