Investing.com -- The dollar rose slightly against the euro in early trading in Europe Monday after a dismal survey from the respected German research institute Ifo.
The institute said export expectations in the euro zone's largest economy slumped in January, less than a week after its widely-followed business confidence index for Germany fell to its lowest in two and a half years.
"December’s ray of hope in the automotive industry has vanished at the beginning of the year," Ifo said in a press release.
"The outlook has worsened noticeably. The same applies to the chemical industry. Hardly any growth in exports is expected from two other key industries: the electrical industry and mechanical engineering."
Also, the European Central Bank said the rate of private sector loan growth in the euro zone stayed at 3.3% in December, disappointing expectations for a slight rise.
The dollar is yet to show a clear trend against the euro this year, after both the Federal Reserve and the ECB were forced into a more cautious posture by the slowdown. It fell on Friday after the announcement of measures to reopen the U.S. federal government encouraged traders to take on more risk.
At 04:10 AM ET (09:10 GMT) the euro was down 0.1% against the dollar at $1.1408.
The dollar index, a gauge of its value versus six major peers was marginally lower at 95.74, after falling 0.8% on Friday.
"The general direction for the dollar is still down and markets will be taking cues from the FOMC this week," said Sim Moh Siong, currency strategist at Bank of Singapore.Major currencies are expected to stay in narrow ranges ahead of two key events this week: the Federal Reserve's Open Market Committee will conclude a two-day meeting on Wednesday, and Chairman Jerome Powell is widely expected to acknowledge growing risks to the U.S. economy as global momentum weakens.
Also, a high-ranking Chinese delegation will arrive in the U.S. for talks on de-escalating the trade war between the two countries.
British Pound Pauses for Breath
Elsewhere in Europe, the British pound was also taking a breather after enjoying its best week in two years against the dollar. It rose over 2.5% as U.K. lawmakers moved closer to ensuring that the country doesn't leave the EU in March without any transitional arrangements in place.
However, fundamental differences remain within the U.K. government over Brexit, and the weekend's newspaper reports suggested the government is no closer to resolving a key dispute with the EU over the status of the U.K.-Ireland border.
The U.K. House of Commons is set to vote on a range of alternative courses for Brexit on Tuesday.
GBP/USD was down 0.2% at $1.3177 against the dollar, and down 0.1% against the euro at 1.1551.
Yuan Rally Helps Aussie, Kiwi
In Asian markets earlier, a rally in the yuan also fueled a bounce in the Australian dollar, which gained 0.18% versus the dollar to $0.7195.
The Kiwi dollar strengthened by 0.3% to $0.6859.
The USD/JPY added 0.2% in early Asian trade at 109.34.
The dollar has gained around 1.2% on the yen over the last two weeks. Not helping the yen was the Bank of Japan's downgrade of its inflation forecasts last week when it also maintained its accommodative monetary policy, as widely expected.
Moreover, Japanese investors have been net buyers of foreign bonds over the last few weeks, stoking demand for dollars. This likely explains why the safe-haven yen has not appreciated during this period even though risks of a global economic slowdown have rattled investor sentiment.
- Reuters contributed to this story.