Dollar pauses, euro up ahead of data

Euro edges back above $1.30 as profit taking sees dollar slip from a five-week high against a basket of major currencies

A pause in the dollar's strong recent run helped steady oil and gold prices on Tuesday, while the euro edged up ahead of data expected to point to an easing of the single currency area's recession.

After a surprising rise in US retail sales boosted optimism about the recovery in the world's top economy on Monday, Germany's ZEW monthly sentiment survey at 0900 GMT is expected to show confidence in Europe's biggest picked up in May.

The euro edged back above $1.30 as profit taking saw the dollar slip from a five-week high against a basket of major currencies.

European stock markets started brightly but the momentum faded by 0720 GMT, with the pan-regional FTSEurofirst 300 down 0.1% as London's FTSE 100, Paris's CAC-40 and Frankfurt's DAX hovered between flat and down 0.1%.

Euro zone industrial production data also due later is expected to indicate the bloc remains in a mild recession.

"We rule out that today's industrial figures should be seen as a sign that the ... (euro zone) economy is on the process of a modest recovery. Indeed, all survey indicators suggest that more weakness is in the cards in Q2," said Newedge economist Annalisa Piazza.

In the region's bond markets, the benchmark German Bund stayed well inside its tight recent range.

The drop back in the dollar allowed gold to find a firmer footing after three days of falls and helped oil to steady at just below $103 a barrel.