LONDON, May 27: The dollar traded mildly firmer against the euro and the yen in holiday-thinned trading on Monday with a lack of fresh market impetus giving the greenback some respite after last week’s losses.

The US unit clawed back lost ground against the single currency after dipping to lows around $0.9220 earlier on after a surprisingly strong German Ifo survey of business sentiment for May, but a national holiday in the US made for subdued trade.

Euro/dollar remains a dollar story, rather than a euro one, and we really need to see significantly worse US data to push the dollar further down, said Michael Klawitter, senior currency strategist at WestLB.

A relatively light data week in the US this week could make for a steadier showing for the dollar in the near-term, he added.

The dollar was a touch up from Friday’s US closing levels against the euro, trading at $0.9193. The greenback hit an eight-month low of $0.9280 last week.

The yen was slightly softer against the dollar as the positive impact from strong Japanese stocks was nullified by wariness over possible yen-selling intervention by Japanese monetary authorities. The yen traded at 124.92 to the dollar.

But the yen could not capitalise, with dealers worried about the potential for further intervention from the Bank of Japan to limit its strength.

Japanese authorities, nervous that a strong yen could hurt Japan’s export-led recovery, intervened on Wednesday and Thursday to buy the greenback after the yen firmed to a 5-1/2 month high of 123.50 per dollar.

For the yen, wariness of intervention is still so strong and the dollar is holding onto gains made last week even with the gains in Nikkei, said David Mann, treasury economist at Standard Chartered.

The Japanese authorities on Monday kept up their pressure against a strengthening yen, with senior Japanese Finance Ministry official Zembei Mizoguchi saying he was still monitoring the market.

Focus is now shifting on to the release of Japan’s gross domestic product figures for the Japan-March quarter on June 7, which are widely expected to show growth of perhaps as much as eight or nine percent on an annualised basis.

If the (Japanese GDP) figures are as good as many predict, another sell-yen factor will leave the market, said Kazuo Takayama, vice president at Toronto-Dominion Bank in Tokyo.

—Reuters