Dollar Edges Lower as Market Seeks Fresh Clues

 
Snapshot: 

        -Dollar dips; 10-year Treasury yield at 1.927%; stock futures lower; oil futures fall; gold lower
        -Watch for: Existing home sales, speeches by Fed's Fischer and Dudley
        News: PBOC Says China Monetary Policy Remains Prudent; Mester: Fed Can Do More on Forward Guidance; Japan Upgrades View of Economy
        The euro slipped in early European trade Monday, as the previous week's rebound showed signs of running out of steam.
        The single currency was 0.5% lower against the dollar at $1.0770, with investors eyeing Greek Prime Minister Alexis Tsipras's visit to Berlin as talks on the future of Greece's bailout continue.
        The euro, which has been under pressure as the European Central Bank's stimulus sparks massive cash outflows from the Eurozone, staged a strong recovery last week after the U.S. Federal Reserve indicated it may not raise interest rates as soon as some investors had expected.
        Despite the dollar's drop, "most players still see it as just a blip in the medium-term bull trend," according to foreign-exchange strategists at Citigroup.
        That trend resumed Monday, with unease over Greece helping to weigh down the euro.
        Greek talks "represent downside tail risks for the euro if relations between the Greek government and its European creditors break down," said Lee Hardman, a currency strategist at Bank of Tokyo Misubishi UFJ.
        Still, the currency remains above the 12-year low of under $1.05 hit earlier this month. The euro also fell 0.4% against the yen.
        The dollar was down slightly in rangebound Asia trade, with a lack of fresh cues in the market to lure investors.
        U.S. Treasurys edged higher, keeping just about all of last week's FOMC-inspired substantial gains.
        The June contract was 2/32 higher at 128-240 and the 10-year yield was 1.927%. Morgan Stanley sees supply as the main focus this week before the next employment report in two weeks time.
        The Treasury will sell $26 billion 2-year notes on Tuesday, $35 billion 5-year notes on Wednesday, and $29 billion 7-year notes and $13 billion 2-year FRNs on Thursday.
        U.S. stock futures pointed to a slight pullback after solid gains last week, with investors watching for comments from Federal Reserve members and waiting for the latest health check on the housing sector.
        Futures for the Dow Jones Industrial Average fell 27 points, or 0.2%, to 18,006, while those for the S&P 500 lost 2.95 points, or 0.1%, to 2,096.25. Futures for the Nasdaq 100 dropped 4 points, or 0.1%, to 4,443.25.
        The declines come after a volatile week, when the big mood swings in the market were fueled by fresh comments from the Federal Reserve about raising interest rates. The central bank dropped its reference to being "patient", but also said it's in no hurry to tighten policy. The Dow average and S&P 500 index posted their biggest weekly gains since early February, while the Nasdaq 100 index mustered its biggest rally since October last year.
        In commodity markets, Brent crude oil declined 1.7% to $54.38 a barrel. Gold was 0.3% lower at $1,181.60 an ounce.
        PBOC Says China Monetary Policy Remains Prudent
        Despite recent easing measures, China's central bank needs to maintain a prudent monetary stance as the economy remains highly leveraged.
        Mester: Fed Can Do More on Forward Guidance
        The Fed's Loretta Mester said the U.S. central bank can do more with the words it uses to help guide the public's expectation of where its interest rate policy may be heading.
        Japan Upgrades View of Economy
        In its monthly economic report, Japan upgraded its assessment of the economy in March for the first time in eight months, citing improvements in production and corporate earnings as the economy pulled itself out of a sales tax-induced recession.
        ECB's Noyer: Possible Side-Effects Mustn't Paralyze Central Bank Action
        European Central Bank policy maker Christian Noyer said Monday central banks mustn't shy away from taking unconventional measures to fulfill their mandates because of fears about possible side effects.
        U.S. to Seek Collaboration With China-Led Bank
        The Obama administration, facing defiance by allies that have signed up to support a new Chinese-led infrastructure fund, is proposing the bank work in a partnership with Washington-backed development institutions such as the World Bank.
        Ruling French Socialists Suffer Setback in Local Polls
        French President François Hollande's Socialist Party suffered an electoral setback as the center-right alliance of former President Nicolas Sarkozy came out on top in the first round of local elections.
        Spain's Socialists Win Andalusia Vote
        Spain's two establishment parties, the Socialists and the conservative Popular Party, staved off a challenge by a pair of insurgent parties in a regional election Sunday in Andalusia.
        Write to paul.larkins@wsj.com
        (END) Dow Jones Newswires

        March 23, 2015 06:23 ET (10:23 GMT)

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