Dollar up on European weakness
Two key economic reports from Germany and France come in weak; traders await Fed decision on rates.
NEW YORK (CNNMoney.com) -- The dollar gained strength against major currencies Monday after two reports indicated weakness in Europe's two biggest economies.
The euro bought $1.5517, up from $1.5623 late Friday. The dollar also gained against the Japanese yen, buying ¥107.852, up from ¥107.145.
A decline in German business sentiment and unexpected contraction of manufacturing and services sectors in France drove the euro down, according to Kevin Chau, foreign exchange analyst with IDEAGlobal.
Germany's IFO Index, a key measure of the health of the euro zone's largest economy, fell to 101.3 points in June from 103.5 points in May.
Meanwhile, a preliminary PMI report from France, a much-watched indicator of the economic performance of the euro zone's second-largest economy, showed that the country's manufacturing and service sectors both contracted in June.
The French PMI fell to 49.2 in June from 50.5 in May. Economists had expected the PMI index to show a slight increase. A reading below 50 indicates contraction.
Coming off of its euro gains, Chau expects dollar values to remain relatively flat through the first half of the week until the Federal Reserve reveals its decision on interest rates.
"I think everyone's going to wait until the [Fed] statement comes out on Wednesday," he said.
Many economists believe the Fed will hold its key bank lending interest rate steady at 2%, but some on Wall Street believe that concerns about inflation could lead the central bank to increase rates. 
