The dollar fell, heading for its first weekly decline against the euro this month, before U.S. consumer and housing reports that may add to evidence the global credit squeeze is pushing the economy toward a recession.
The U.S. currency also dropped against the British pound and the Swiss franc as traders added to bets on a Federal Reserve interest-rate cut. The yen was poised for a weekly loss versus the euro as Asian stocks rose, restoring investors' confidence to buy higher-yielding assets
The dollar headed for weekly losses against nine of the 16 most-active currencies as U.S. housing starts declined to an annual rate of 870,000 in September, the fewest since January 1991, according to survey of economists. The Commerce Department will issue the report at 8:30 a.m. in Washington.
The Reuters/University of Michigan preliminary index of consumer sentiment, due at 10 a.m., likely decreased to 65.0 in October from 70.3 in September, a separate survey showed.
Losses in the dollar may be curbed on speculation financial institutions will seek more dollars in the foreign-exchange market amid the credit crisis, according to BNP Paribas SA.
EUR/USD having tested session high on $1,3520, the pair has decreased in area $1,3430.
GBP/USD the pair could not overcome area of yesterday's high on $1,7350 then has receded below a mark $1,7300.
USD/JPY the pair is corrected after yesterday's growth.
European data sees Italian August industrial orders at 0800GMT, though the main European releases are at 0900GMT with Eurozone construction production and the trade balance, which is seen moving to E5.3 billion for August.
US data sees the 1230GMT release of housing starts and building permits for September, followed by the 1355GMT release of the University of Michigan preliminary consumer sentiment data for October. Housing
starts are forecast to fall to an 885,000 annual rate in September after two sharp declines, while the Reuters/University of Michigan Consumer Sentiment Index is expected to fall to a reading of 65.0 in early-October on the intense market turmoil seen at the end of September and early-October.