Investing.com - The euro regained some ground against the dollar on Monday, backing away from 12-year lows as the greenback was hit by concerns over the impact of its recent sharp gains on corporate earnings.
EUR/USD rose to session highs of 1.0614 and was last at 1.0567, up 0.7% for the day. The pair fell to lows of 1.0471 overnight, the weakest since January 9, 2003.
The euro was boosted after Italy's central bank governor expressed concerns over the pace of its fall since the European Central Bank launched its trillion-euro quantitative easing program early last week.
He added that there were risks the program could overshoot its goal, as well as fuel an excessive rise in asset prices.
The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was down 0.54% to 100.17.
The dollar has strengthened on the back of the diverging monetary policy stance between the Federal Reserve and central banks in Europe and Japan.
The Fed is widely expected to start raising interest rates around mid-year and investors were looking ahead to Wednesday's Fed statement to see if it will drop its reference to being “patient” on the timing of an interest rate increase.
Official figures on Monday showed that U.S. industrial production rose just 0.1% in February, falling short of expectations for a 0.2% gain.
Manufacturing output dipped 0.1% as automobile production fell, indicating that economic growth could slow in the first quarter.
Another report showed that manufacturing activity growth in New York State slowed in March for a second straight month as new orders fell.
The softer-than-expected data tempered expectations on the wording of Wednesday’s statement.
Meanwhile, USD/JPY eased 0.09% to 121.27, not far from last Tuesday’s eight year highs of 121.40.
EUR/JPY advanced 0.72% to 128.29, off Friday’s 20-month lows of 126.91.