Euro fell in European trade for another session off five-eek highs on active profit-taking, amid mounting risks about European growth and after an interest rate cut in China.

Dollar is also gaining considerable ground following disappointing Chinese data, which cast doubt on the overall performance of the global economy. 

EUR/USD fell 0.6% to 1.0192, after losing 0.6% against dollar, the first loss in five days, off five-week highs at 1.0369 on profit-taking. 

Euro maintained a 0.8% profit last week against dollar, the third weekly profit in a month. 

Growth Risks

Analysts continue to doubt economic growth prospects in Europe as energy supplies collapse due to the ongoing crisis in Ukraine, in turn hurting euro's standing. 

The People's Bank of China earlier cut interest rates unexpectedly, on one-year lending rates to certain loans by 10 basis points to 2.75%.

The Dollar

The dollar index rose over 0.6% on Monday for another session against a basket of major rivals. 

A batch of weak Chinese industrial data boosted haven demand on the greenback, ahead of important US retail sales data and the Fed's minutes. 

Oil futures fell 1% in Asian trade off August 3 highs as the dollar index climbed from June 29 lows, following earlier Chinese data that was quire disappointing. 

Markets also continue to assess the ongoing US-Iran nuclear negotiations, which might open the way for Iranian crude exports worldwide. 

OPEC recently expected global oil demand in 2022 to grow by 3.1 million bpd to nearly 100 million bpd, cutting off 260 thousand bpd from calculation.

As of 06:10 GMT, US crude futures due in September fell 1.03% to $91.00 a barrel, while Brent October futures fell 0.80% to $96.98 a barrel, as the dollar index rose 0.13% to 105.80.

From China, industrial output rose 3.8% in July, slowing down from 3.9% in June, and missing estimates of 4.5%. 

China's retail sales rose 2.7%, missing estimates of 5% heavily, and down from 3.1% in the previous reading. 

The People's Bank of China earlier cut interest rates unexpectedly, on one-year lending rates to certain loans by 10 basis points to 2.75%.

From the US, the Empire State Manufacturing index is expected down to 5.1 in August from 11.1 in July. 

Two-year and five-year treasury yields curves remain reversed, in an ominous sign for an upcoming depression in the US economy. 

Otherwise, a party of US lawmakers have arrived at Taiwan to discuss relations with Taiwanese government and investments.

China continues to condemn such moves and developing relations between US and Taiwan, and has already begun threatening military actions around Taiwan as a threat. 

Otherwise, China continues to face a very stubborn Covid 19 wave that continues to impede growth, with World Health Organization reporting 585.05 million global infections worldwide so far, with the death toll at 6.425 million.

Baker Hughes data showed US oil rigs rose by 3 to 601 rigs, while rising in July for the 24th month in a row, with US output stabilizing at 12.1 million bpd, the highest since April 2020.

US output remains down a million bpd, or 8% from record highs at 13.1 million bpd in March 2020. 

US stock indices rose on Friday on steady track for weekly gains. 

US consumer prices earlier this week showed a slowdown in the pace of inflation during July.

Thus bets have now shifted from a 0.75% rate hike by the Fed at the next meeting to actually 0.5%.

Dow Jones rose 0.4% to 33,465 as of 14:20 GMT, while S&P 500 rose 0.7% to 4,236, as NASDAQ rose 1.1% to 12,914. 

Gold futures tilted lower in Asian trade off late June highs as the dollar index climbed off June 29 lows, following earlier European data and ahead of US consumer sentiment data.

As of 09:52 GMT, gold futures due in December fell 0.14% to $1,802 an ounce, while the dollar index rose 0.18% to 105.35. 

Earlier French data showed consumer prices rose 0.3% in July as expected m/m, and 6.1% y/y as expected as well. 

Italian trade deficit rose to 2.166 billion euros from 62 million euros in May, while analysts expected a surplus of 350 million euros.

Euro zone industrial output rose 0.7%, slowing down from 2.1% in May.

From the US, the UoM consumer sentiment survey is expected up to 52.5 in August from 51.5 in July. 

Fed Chicago President Charles Evans said the labor sector is very lively and strong and lauded employment numbers, and expressed strong optimism for the US economy's growth in the second half of the year.

Evans expects growth between 1.2% and 2% next year, with the Fed supposed to hike rates six month before that, expecting final interest rates by 3.5% by year's end, and could reach 4% later.

Other Fed members expressed confidence in the economy as inflation numbers continue to taper off and moderate, however the Fed remains on a path to tighten monetary policies and hiked rates to maintain a lid on prices.

Analysts reduced bets on a 0.75% rate hike by the Federal Reserve at the next policy meeting, in turn hurting the greenback's position, however an overall directions towards policy tightening maintains a lid on gold prices. 

China continues to face waves of Covid 19 in several major cities, with latest World Health Organization data showing 585.09 million infections worldwide, with the death toll mounting to 6.422 million.