Dollar edges higher
Investors brace for U.S. consumer and housing data in day of thin trade.
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NEW YORK (Reuters) -- The dollar edged up against the euro and yen Monday in extremely thin trade as Wall Street surrendered early gains and traders adjusted positions ahead of consumer and housing data due this week.
Solid euro zone data and an upbeat assessment on the economy from Federal Reserve Chairman Ben Bernanke had pushed investors to take on riskier investments at the expense of the the lower-yielding yen and dollar, though that trend faded along with stocks' rally.
"There's a belief that stocks are a bit overextended, so we expect market appetite for risk to ebb in the next few weeks," said Greg Salvaggio, vice president for trading at Tempus Consulting in Washington. "That will lead to dollar strength."
He said consumer confidence data on Tuesday and German business sentiment data will be closely watched this week.
The dollar was last up 0.1% at ¥94.49 while the euro slipped 0.2% to $1.4293. Against the yen, the euro was little changed at ¥135.11 despite data showing higher-than-expected euro zone industrial orders in June.
The pound fell 0.6% on the day to $1.6415.
The euro, meanwhile, hit an 11-week high against the pound at 87.27 pence, according to Reuters data. Analysts said expectations for persistently low UK interest rates were weighing on the British currency.
The Federal Reserve's Jackson Hole meeting over the weekend offered a variety of opinions about the global economy, with Fed Chairman Ben Bernanke acting as the cheerleader for growth.
But traders are keen to see how the euro zone economy fares, especially after higher-than-forecast purchasing managers' index readings last week. Germany's Ifo survey of business sentiment will be key this week, analysts said.
The Conference Board will release its August consumer confidence index on Tuesday, followed by the Reuters/University of Michigan consumer sentiment snapshot on Friday.
Nouriel Roubini, professor at New York University's Stern School of Business and one of the few economists who accurately predicted the magnitude of the current crisis, wrote in The Financial Times on Monday that there is still a "big risk" of a double-dip recession.
Allan Meltzer, a political economy professor at Carnegie Mellon University, also told Reuters that the flood of money the Fed and Treasury have injected into the banking sector and economy since the crisis began will soon threaten the dollar.
"Will the Chinese continue to buy the trillions of dollars worth of debt that the Treasury intends to put out every year? We don't know, but if not, the pressure will be on the Fed to keep buying it, and my guess is that's going to be inflationary over the next couple of years, and the dollar will suffer," he said. 
