2014.03.2405:20:51UTC+00U.S. dollar advance needs fresh catalyst

Major currencies got off to a lackluster opening on Monday trading action following a relatively tedious weekend with the dollar clenching onto most of last week's solid advances.

The dollar index .DXY settee at 80.130, slightly altered from late New York levels on Friday, but still not far off a three-week topmost mark of 80.354 set on Thursday.

Investors cut down the greenback last week as they swiftly brought forward the risk of a U.S. interest rate advance early in 2015 after new Fed Chair Janet Yellen surprised markets by bolstering the prospect of such a move.

Traders said further hikes for the dollar now depends on the strength of next data with any acceleration in the U.S. economic recovery likely to surge assumptions of an earlier normalization of Fed policy.

"A broader-based rally in USD requires validation of the Fed's more aggressive interest rate forecasts from a continued step-up in U.S. data," analysts at JPMorgan wrote in a note to clients.

The euro was unmoved at $1.3791, having drifted up from a two-week trough of $1.3749. Versus the yen, the dollar was a altered softer at 102.21 as was the euro at 140.96.

Despite last week's 0.9 percent drop, the euro was still not far from a 2-1/2 year high of $1.3967 set earlier in the month. That resilience triggered the president of the European Council, Herman Van Rompuy, to grumble on Friday that the regular currency was too powerful for euro zone exporters.

Partly aiding the euro has been the idea that the European Central Bank is highly averse to ease policy any further.

Governing Council member Erkki Liikanen on Saturday, however, held out the chances of further trims, including taking the deposit rate to downbeat position.

ECB President Mario Draghi will have a chance to press home the message that the bank will stick to a very accommodative policy position for a long time when he speaks in Paris on Tuesday.

Another currency displaying an extraordinary resilience is the Australian dollar, which has curbed back upwards 91 U.S. cents, well off last week's low of $0.8990.

Traders stated that Aussie bears have been frustrated by latest unsuccessful tries to push the currency on a lower note, forcing some to slash short positions.

Reserve Bank of Australia Governor and his deputy will both have the chance to discuss the currency, should they prefer to, when they speak at different events this week.

The more stable Aussie was unexpected especially given the fact that it is regularly utilized as a liquid proxy for China plays and worries about the world's second largest economy if anything, have risen lately.

From unsatisfactory economic data, to the country's first-ever domestic bond default and an advance in yuan volatility, there is plenty for China bears to chew over.

As an outcome, investors will be keeping a close eye on a survey of China's manufacturing division due at 0145 GMT. In February, factory activity sagged down again, backing up issues of a slowdown in the economy.

Last week, the yuan suffered its largest weekly decline versus the dollar to hit 13-month lows, although there were indications the currency may be finding a base.

While the pullback was engineered by the central bank, which has stepped up efforts to shake out hot money from the market, there are worries it could have unintended consequences.

Top Chinese leaders over the weekend reaffirmed the country will unveil market-based exchange rate and a market-based interest rates for the yuan currency.