Euro stable against dollar before week's data

LONDON (AFP) - The euro was stable against the dollar on Monday as investors waited for signals on the global economic outlook from a series of key reports and a European Central Bank meeting this week.

In late afternoon trading here, the European single currency edged up to 1.4066 dollars from 1.4064 dollars in New York late on Friday.

Against the Japanese currency, the dollar gained to 95.56 yen from 95.22 yen on Friday.

The euro failed to win much support on currency markets from a rise in the European Commission's economic sentiment indicator for the 16-nation eurozone for a third month in a row, dealers said.

Investors were waiting for key economic data due this week, with the focus on a US jobs report on Friday which will give a clearer picture of recovery prospects for the world's largest economy.

"The news and data over the coming week is expected to be asset market friendly, supporting risk appetite, suggesting that the US dollar will remain under broad based pressure," analysts from French bank BNP Paribas said.

Derek Halpenny of Bank of Tokyo-Mitsubishi said it would be "a heavy week of economic data culminating with the US employment report and the ECB monetary policy meeting on Thursday."

The US data "should confirm a further gradual improvement," he added.

Although the pace of job losses in the United States appears to have slowed recently, the unemployment rate hit a 26-year high of 9.4 percent in May.

The European Central Bank was meanwhile expected to keep its lending rate unchanged at a record low of one percent when it meets.

"Like disappointed children tapping on the perspex of the inactive reptile display at the zoo, markets are hoping some of the top tier releases this week will rattle the currency market out of its torpor," said Daragh Maher, deputy head of global foreign exchange strategy at Calyon.

Traders learned on Monday that a European business and consumer confidence index rose to 73.3 points in June from 70.2 points, climbing further away from a record low 64.6 points reached in March.

"The increase observed at sector and country level is mainly driven by improving expectations, as the main economic actors seem to be gaining confidence that the crisis is easing," the commission said in the report.

Market players were meanwhile also looking ahead to a closely watched survey of Japanese business confidence due out on Wednesday.

The Bank of Japan's quarterly "Tankan" survey is expected to show an improvement in sentiment among Japan's major manufacturers from a record low the previous quarter, helping to underpin improving investor confidence.

Government numbers released on Monday showed that Japanese industrial output rose by 5.9 percent in May from the previous month, matching the previous month's growth, which was the fastest in half a century.

The data "underscores the view that the Japanese economy hit bottom in the April-June quarter," said Hachijuni Bank forex strategist Yoshifumi Suzuki.

"But with consumption and wages still sluggish, it will be difficult to go so far as to say that a recovery will take place in the following quarter."

In trading here on Monday, the euro was changing hands at 1.4066 dollars against 1.4064 dollars late on Friday, 134.30 yen (133.95), 0.8502 pounds (0.8509) and 1.5250 Swiss francs (1.5226).

The dollar stood at 95.56 yen (95.22) and 1.0852 Swiss francs (1.0825).

The pound was at 1.6534 dollars (1.6521).

On the London Bullion Market, the price of gold fell to 935.50 dollars an ounce from 942 dollars an ounce late on Friday.