Dollar struggles against yen, euro

TOKYO, Feb 2 (AFP) : The dollar struggled against the yen and euro Monday as US and Chinese data disappointed markets, while the euro recovered slightly after falling on fears about the new Greek government's testy talks with international creditors.

In Tokyo afternoon trade, the dollar edged up to 117.63 yen from 117.59 yen in New York.

The euro rose to $1.1303 from $1.1284, and to 132.97 yen from 132.70 yen in US trade.

The US Commerce Department said Friday that the world's top economy expanded at an annual rate of 2.6 per cent in the fourth quarter, well below the 5.0 per cent in the previous three months.

The disappointment was compounded by news that prices in the eurozone fell by a record 0.6 per cent in January, fanning concerns that the currency bloc is facing years of deflation.

Traders were also reacting Monday to news that China's official purchasing managers index (PMI) of manufacturing activity unexpectedly retreated last month for the first time in more than two years.

Data Sunday showed its PMI at 49.8 last month, against 50.1 in December. Anything below 50 points to contraction and anything above indicates growth.

"Market sentiment is turning risk-averse after both the US growth figures and the Chinese manufacturing data fell short of estimates," Atsushi Hirano, head of FX sales in Japan at Royal Bank of Scotland, told Bloomberg News.

"There's a growing risk the yen could climb to the mid-115 level versus the dollar by the middle of this week."

Currency traders tend to move into the yen during times of uncertainty or turmoil.