Dollar steadies after losing ground to majors, Monday, May 19, 2008 7:11:52 AM

The dollar hit the skids against other major currencies in early action Monday morning in New York, but was able to pare its losses despite lingering concerns about the health of the US economy.

With little economic data set for release on Monday, market players will be looking ahead to this week`s FOMC minutes from the April monetary policy meeting, April PPI, home price index and existing homes sales data.

At 10 am ET, April`s leading indicators will be released, which are expected to slip 0.1% following March`s 0.1% rise.

The dollar was little changed in choppy dealing against the euro approaching 7 am ET Monday. The buck dropped to a 2 1/2 week low of 1.5630 before fighting back to 1.5575. European Central Bank President Jean Claude Trichet told the BBC that, while the current situation was challeging, high inflation `will not last forever.`

The buck came under modest pressure in early dealing against the yen, easing to 103.65 before bouncing back to 104.10. The Bank of Japan kicked off its regular two-day monetary policy meeting on Monday, headlining Monday`s economic news in Asia. The BoJ is scheduled to announce its interest rate decision sometime Tuesday morning, widely expected to keep rates at 0.50 percent.

Traders also considered data showing that Japan`s nationwide department store sales fell at a faster pace of 3.4% year-on-year in April, compared to a decrease of 1.2% in March.

The greenback dropped to a 2-week low of 1.9623 before reversing its early losses to trade at 1.9560 approaching mid-morning. Asking prices for houses in Great Britain increased 1.2 percent in May from the month before, according to a report issued Monday by RightMove.

The group warned that the figures do not indicate a return to a positive housing market, pointing out that the national averages were pushed higher by `discretionary spring sellers` of large properties in the southeast section of England, where prices rose 4.2 percent in May.

The dollar stayed on the defensive against the loonie in subdued dealing Monday morning, slipping to a 2-month low of .9924. Markets in Canada are closed for Victoria Day.