Euro Heads Lower Against Dollar

The euro was lower against the dollar on Monday, reversing earlier gains and dropping below $1.36 as investors focused on President-elect Barack Obama's economic stimulus plan.

The 16-nation currency had opened higher in early trading, climbing as far as $1.3963, but fell back to an intraday low of $1.3552 in the European afternoon.

The euro, which was adopted by Slovakia on Jan. 1, then recovered slightly to $1.3582 in mid-afternoon trading. In late trading on Friday in New York it had bought $1.3854.

"The dollar started the first full trading week of 2009 significantly higher against most of its major trading partners, notably against the euro and the yen," said Bhav Dhanak of Wachovia Bank. "This was due in large part to market optimism toward President-elect Obama's announced economic stimulus plan."

Obama will meet with top U.S. lawmakers later Monday to push for quick action on a broad economic stimulus package that congressional leaders are saying won't be ready until mid-February at the earliest.

Obama, a Democrat, takes office Jan. 20 and has insisted bold and quick action is necessary if the nation is to rebound from the greatest economic crisis since the Great Depression of the 1930s. He has said repeatedly he wants a plan that will create three million new jobs.

Markets are also looking ahead to fresh U.S. data on everything from jobs to manufacturing and car sales in the coming week.

The British pound strengthened marginally against the dollar, buying $1.4488 compared with $1.4471 at the end of last week, with analysts expecting a rate cut by the Bank of England on Thursday from its current 2%.