US dollar rebounds against euro

AAP, with a staff reporter

The United States dollar has rebounded after a steady slide against the euro since January 24, helped by a return of concerns about eurozone progress and an over-strong euro.

After trading at $US1.3637 late last week- having topped the $US1.37 level during the day - the euro dropped to $US1.3503 at 1000 AEDT.

The fall paralleled drops in equity and oil markets, all of which had been buoyed by both rising confidence and market momentum last week.

Markets were jolted after Spanish Prime Minister Mariano Rajoy was pressured to resign amid a growing corruption scandal, while in Italy, the party of former prime minister Silvio Berlusconi showed solid gains in polls ahead of elections later this month.

Also feeding selling was French Finance Minister Pierre Moscovici's concerns about the euro's rise.

"The euro is stable, the euro is strong, perhaps too strong in some regards," Mr Moscovici told France 2 television.

He said that while he was not seeking to "launch an offensive" to drive down the euro, "it seems completely legitimate to me that there be a debate on the question of proper global exchange rates in international forums".

Kathy Lien, managing director of BK Asset Management, said the currency pair was due for a correction.

"The European Central Bank has a monetary policy meeting this week and while their message is not expected to change, it will be difficult for (ECB chief) Mario Draghi to avoid talking about the currency," she said.

The yen meanwhile rebounded after its steady fall driven by pressure to reinflate the Japanese economy from the new prime minister, Shinzo Abe.

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