Dollar drifts above four-week low against euro

The dollar dipped to a four-week low against the euro on Monday before rising slightly on profit-taking, as steep oil prices and weak US data continued to fan worries about the health of the world's largest economy.
On Friday data showed the US trade deficit widening to a record $55.8 billion, and sparked the debate afresh on whether the United States can attract enough foreign investment to fill its external shortfall.
Data on portfolio inflows to the United States will be published at 1300 GMT and analysts said a weak figure may prompt a fresh wave of dollar-selling.
Other US figures due on Monday include the New York Federal Reserve's Empire State Manufacturing Survey for August at 1230 GMT. It is seen down to 32.5 in August from July's 36.5.
"The portfolio data has in the past months shown potential to move the market on adverse numbers," said Shahab Jalinoos, senior currency strategist at ABN Amro in London.
"Given how fragile the market mood is after Friday's trade data, another set of bad numbers from the investment data could give the dollar a serious blow."
The dollar fell to $1.2381 per euro in Asian trade on Monday, its lowest since July 20. But by 1146 GMT it had recovered slightly to $1.2340.
It was steady on the day against the yen at 110.70 and slightly higher versus sterling at $1.8429.
"We have the RICS (Royal Institute of Chartered Surveyors) housing survey from the UK tonight and that could be quite important and could continue to undermine sterling," said Ian Gunner, head of foreign exchange research at Mellon Bank in London.
Sterling has been under some pressure last week, hitting one-month lows against the euro, following a series of dovish comments from the Bank of England.
The BoE hiked interest rates last week but some investors are now speculating that further tightening could be less aggressive than previously thought, particularly if house price inflation moderates.
Analysts said that recent data has shown that steep oil prices have already begun to hurt the US economy, damaging consumer sentiment, boosting producer prices and imports.