* Dollar index trades near previous day's 1-week low
* Weak NY Fed manufacturing survey weighs on dollar
* Euro holds firm, having edged back up toward $1.10
SINGAPORE, May 16 The dollar traded near a
one-week low versus a basket of major currencies on Tuesday,
having come under pressure after a surprisingly soft U.S.
The New York Federal Reserve said on Monday its barometer on
business activity in New York state unexpectedly fell in May,
sinking into negative territory for the first time since
Analysts cautioned that the downturn could be a
harbinger of possible deterioration in the manufacturing sector.
The dollar index, which measures the greenback's value
against a basket of six major currencies, last traded at 98.855
. On Monday, it touched a low of 98.787, its weakest level
since May 8.
On the whole, Teppei Ino, analyst for Bank of
Tokyo-Mitsubishi UFJ in Singapore, said the weak reading on New
York manufacturing activity hasn't substantially altered the
positive sentiment toward the U.S. economy.
"I think people want to wait and see," Ino said, adding the
general view seems to be that the U.S. economy is still holding
The euro edged up 0.1 percent to $1.0984 after
gaining 0.4 percent on Monday.
The single currency is now within sight of a six-month high
of $1.1024 set last week, when it rose on a relief rally after
centrist Emmanuel Macron was elected France's president.
The dollar eased 0.1 percent against the yen near 113.71
, after rising 0.4 percent on Monday.
The greenback has risen more than 1.9 percent against the
yen so far this month, as risk sentiment improved after France's
presidential elections and focus shifted back towards the
outlook for monetary policy.
Market expectations for the Federal Reserve to raise
interest rates in June have helped underpin the dollar recently.
"If strength in equities or rises in yields around the world
continues, that will probably result in a supportive environment
for the dollar against the yen," said Shinichiro Kadota, senior
FX strategist for Barclays in Tokyo.
The Australian dollar rose 0.2 percent to $0.7428,
staying on a firm footing after getting a boost on Monday, when
oil prices jumped about 2 percent.
(Reporting by Masayuki Kitano; Editing by Shri Navaratnam)