Euro makes small gains against the US dollar

The euro strengthened against the US dollar by 0.30 cents on Monday, to finish the day at $1.3981.

• Weak eurozone retail data and a grim US jobs report released last week reaffirmed fears over the recovery of the global economy, which in turn increased risk aversion as it pointed to the view that investors have been far too optimistic regarding recovery prospects.
  
• However, despite this increased risk aversion the dollar’s gains were limited yesterday due to speculation that its status as the global reserve currency may be discussed at the G8 meeting in Italy. There have been reports that China is keen to discuss a new global reserve currency, however the vice minister said in Rome on Sunday that the dollar would be the most important international reserve currency for years, according to China's official Xinhua news agency.
  
• The dollar strengthened against the euro this morning in anticipation of the Group of Eight (G-8) meeting due to take place this week. In Asia on Monday, the dollar was mixed against other major currencies as investor caution grew ahead of a summit of the Group of Eight (G-8) economic powers this week.