Euro flat in New York

The euro ended little changed against the US dollar on Monday after reaching a two-week low, but near-term gains will likely be limited as weak German industrial data fuel doubts of interest rates rising in the eurozone.
European Central Bank President Jean-Claude Trichet doused expectations of an imminent rate increase last week, saying inflation would remain contained. The German data bolstered that view, prompting investors to book more profits after the single currency's new year rally.
Analysts said the euro's near-term direction would hinge on the progress of discussions on a eurozone debt rescue fund. "Last week's less-hawkish comments from ECB President Trichet remain key to the recent turnaround in the euro and the currency appears vulnerable to further downside, a factor that could contribute to a broadly stronger US dollar in the coming days," said Vassili Serebriakov, currency strategist at Wells Fargo in New York.
Bernanke's testimony is scheduled for Wednesday. The dollar weakened against the euro through most of January on expectations rising inflation would prompt the ECB to raise interest rates much earlier than the Fed.
"Those expectations were far too speculative and thus why we have seen a sharp turnaround this past week," said Jessica Hoversen, foreign exchange and fixed income analyst at MF Global in Chicago. She said profit-taking and a disappointing read of German industrial orders helped weaken the euro versus the dollar.
After underperforming the dollar for three straight days, the euro was nearly unchanged at $1.3586, or 0.01 percent higher, in late afternoon New York trading. It earlier hit a low of $1.3508 on electronic trading platform EBS. The euro had hit a two-week low, falling below the current 100-day simple moving average, a key support, at around $1.3532. Investors focused on $1.3500, followed by $1.3480, the 38.2 percent retracement of the January-to-February rally.
Against the yen, the dollar added 0.2 percent at 82.30 yen after rising more than 1 yen from a one-month low of 81.10 hit just after the Friday jobs data. Resistance is at 82.56, the top of the Ichimoku cloud, a closely watched technical indicator.
Market participants are starting to factor in higher US interest rates for 2012, particularly after Friday's jobs report, which showed a decline in the unemployment rate to 9.0 percent last month. That led to a rise in benchmark US yields and a widening of the spread against 10-year German bunds in favour of US Treasuries, which added to the dollar's appeal.
In the latest week, currency speculators raised bets on the euro to the highest level since late October after weeks of significant shorting, according to the latest data from the Commodity Futures Trading Commission.