LONDON: Surveys of service sector purchasing managers were the best hope for some direction for the major currency pairs on Tuesday, with a strong Swedish number launching the crown to a day’s high at the start of the European day.

The dollar was stuck just below a 10-1/2 month peak against a basket of currencies in a quiet Asian session, after US jobs data last week called a halt to three weeks of strong gains.

Australia’s dollar was also little moved after a central bank decision and statement that, as expected, had little to add to the policy outlook from a month previously.

The European PMI surveys are all expected to show healthy expansions. That should be followed in the afternoon by another robust readout on US manufacturing from a similar survey in the United States.

The services PMI for Sweden, flirting with deflation in recent months, shocked by surging to 60.1 points from 54.6 a month earlier, taking the crown as high as 9.215 crowns from 9.235 beforehand.

“It had been trending higher but this is a surprise,” Citigroup strategist Josh O’Byrne said, noting that the crown is fairly valued at current levels against the euro and dollar.

“The momentum has been good in Sweden in recent months and if inflation does begin to pick up as the Riksbank expects then we may get back to seeing some upward potential later this year,” he said.

The euro had lost as much as 6 cents against the dollar since early May before stabilising at the end of last week just above $1.34 (Dh4.90). It traded at $1.3422 in the European session.

Sterling has also suffered in the past week, falling more than 2 per cent against the greenback, but Britain’s economic outlook is more positive than prospects for the euro zone.

Any new evidence that an improvement in UK growth is finally beginning to translate into upward pressure on wages and prices would bolster lingering hopes of a rise in interest rates this year.

“A stronger PMI [in the UK] may moderate the caution on sterling that we’ve seen in the past week or so,” O’Byrne said.

“It is starting to look more attractive again.”

Dollar bulls have cooled their heels since data on Friday showed that US jobs growth slowed a bit in July and/sunemployment rose, pointing to slack in the labour market that could give the Fed room to keep interest rates low for a while.

That has eaten away at speculation the dollar was finally beginning a longer-term rally, but the dollar index, at 81.299 , is still within sight of last week’s highs.

The dollar eased 0.1 per cent versus the yen to 102.49 , inching away from a near 4-month high of 103.15 yen set last week.

“We remain constructive on the US dollar, and continue to run long USD/JPY and short EUR/USD trades in our recommendations portfolio,” BNP Paribas analysts wrote in a note to clients.

Both the European Central Bank and the Bank of Japan meet on policy this week.

Australia’s central bank kept its cash rate at a record low of 2.5 per cent on Tuesday but of slightly more importance for its dollar was a survey showing growth in China’s services sector slowing to its lowest in nearly nine years.

Still, the Aussie was up 0.1 per cent on the day to $0.9342 , above a two-month low of $0.9275 set on Friday.