By: Hillel Fuld
The USD on Monday regained some ground which was lost from a renewed focus on U.S. quantitative easing, and was helped by short covering, while the EUR fell back towards channel support ahead of a meeting of European finance ministers.
The US currency pulled up off a three-week low versus the JPY and two-weeks lows against the EUR set on Friday after disappointing U.S. jobs data and a report that Federal Reserve Chairman Ben Bernanke did not disqualify bond purchases beyond those planned.
The comments, which were aired on Monday, served as a reminder that the Fed's second round of easing, in which it plans to buy $600 billion in assets, remains a weight on the USD, although the resulting easy liquidity is supportive of risk trades.
As the greenbac shed 1.5 percent vs the yen on Friday and more than 1 percent against a basket of currencies, it had scope for a bounce in thin volume on Monday, analysts said.
"Friday's moves were so rapid that it is natural to have a bit of position unwinding," said Keiji Matsumoto, strategist at Nikko Cordial Securities.
"There's also a feeling that there could be more bad news from the euro zone" Matsumoto added,
The usd rose 0.4 percent to 82.88 yen JPY climbing off Friday's three-week low of 82.52 yen, and it gained 0.3 percent on the index.
Still, just as euro zone debt concerns return periodically to dog the euro, U.S. asset-buying will haunt the dollar.