Euro drifts lower against dollar ahead of U.S. housing starts

The euro drifted lower against the U.S. dollar in European trading Monday as markets waited for a report showing the health of existing American home sales.

In midmorning European trading, the 15-nation euro bought US$1.4808, slipping lower from the US$1.4825 it bought late Friday in New York.

Markets are keen to see what the latest reading on existing U.S. home sales in January were, hoping to divine the health of an economy still mired in the subprime mortgage debacle.

"There's not a great deal of high profile economic data scheduled for release during the day's session, but many traders will continue to look for suggestions as to whether the U.S. economy can still avoid recession," said Gary Thomson, head of sales trading at CMC Markets.

"The one fundamental reading of note today for the U.S. dollar is likely to be January's existing home sales data, but again with expectations being relatively modest it would take a rather disappointing reading here to heap much additional downside on the dollar," he said.

The report comes as the 27-nation EU is dealing with slowing consumer spending, a possible U.S. recession and tighter borrowing conditions.

The dollar fell rose against the yen, to purchase 107.43 Japanese yen, from 106.93 yen Monday.

The British pound fell to US$1.9626 from US$1.9687 on Monday.