The dollar rose to one year highs against the broadly weaker euro on Monday as concerns over the conflict in Ukraine and weak euro zone economic data continued to weigh on the single currency.
EUR/USD hit lows of 1.3119, the weakest level since September 6 2013 and was last trading at 1.3130.
Investors were continuing to monitor the situation in Ukraine ahead of negotiations due to take place later in the day between Ukrainian and Russian officials and pro-Russian separatists after talks last week resulted in no major breakthrough.
Concerns that sanctions against Russia would act as a drag on growth in the euro zone have weighed on the single currency in recent weeks.
Meanwhile, data on Monday confirmed that Germany’s economy contracted by 0.2% in the second quarter, in line with forecasts and unchanged from a preliminary estimate.
Separate reports showed that Germany’s manufacturing sector expanded at the slowest pace in 11 months in July, while factory activity in France contracted at the quickest pace in 13 months.
Slowing growth in the euro area looked likely to add to pressure on the European Central Bank to implement fresh measures to shore up the faltering recovery in the region, ahead of its upcoming monetary policy meeting on Thursday.
Elsewhere, GBP/USD was up 0.23% to 1.6637 ahead of U.K. factory data due out later in the session.
The dollar was supported close to one week highs against the yen, with USD/JPY at 104.15 and was close to 10-month peaks against the Swiss franc, with USD/CHF at 0.9184.
AUD/USD eased up 0.10% to 0.9346, while NZD/USD added 0.29% to trade at 0.8383.
The commodity linked dollar showed a muted reaction after data earlier Monday showed that factory growth in China slowed last month. China’s official manufacturing index ticked down to 51.1 from 51.7 in July, while the HSBC manufacturing index slowed to 50.2 from 50.3 the previous month.
Elsewhere, USD/CAD slipped 0.11% to 1.0865.
The US Dollar Index, which tracks the performance of the greenback versus a basket of six other major currencies, was at 82.73, not far from Friday’s 11 month highs of 82.79.