LONDON: The dollar won support on Monday from falling equity markets and concerns about an escalating trade dispute between China and the United States, dealers said. In late morning trade here, the European single currency fell to 1.4536 dollars from 1.4573 dollars in New York late on Friday. Against the Japanese currency, the dollar rose to 90.73 yen from 90.64 yen on Friday. In earlier Asian trade, however, the greenback had hit a seven-month low of 90.19 yen, as a pre-weekend pullback on Wall Street and lower US bond yields prompted investors to put their money elsewhere. But falling global stock markets and the China-US trade row have since lifted the safe-haven US currency somewhat. "Euro/dollar is starting the week slightly weaker," said Commerzbank analyst Antje Praefcke. "Notably, weaker stock markets in Asia have allowed the dollar to appreciate this morning. This development is supported by tensions between China and the United States." Europe's main stock markets retreated on Monday, mirroring pre-weekend losses on Wall Street and earlier in Asia, as investors took profits from recent gains. China on Sunday hit out at US tariffs on its tyre exports and said it would investigate possible unfair practices in US exports of car parts and chicken meat, in a growing row between the two giants.

China has already warned that it was likely to retaliate against the US tyre tariffs, adding that the US move amounted to a "grave" form of protectionism. "Following the imposition of import duties on tires from China to the US, Beijing last night announced an investigation into poultry imports from the US in connection with a suspicion of price dumping," added Praefcke. "Should these tensions escalate, they threaten to disturb world trade, which would affect the economic recovery." The euro was meanwhile dampened on Monday by a raft of downbeat economic news. Industrial production in the eurozone fell by 0.3 percent in July and by 15.9 percent over 12 months, the EU's Eurostat data agency said. The figures, which were adjusted for seasonal variations marked a slight slowdown from June when industrial production decreased by 0.2 percent, showing that in some areas of Europe's economy the green shoots of recovery have yet to take root. The European Commission forecast that the European Union economy will shrink by 4.0 percent in 2009 -- but would climb out of recession in the third quarter. But the recovery from recession will be weighed down by rising unemployment and strained government finances, it cautioned. In London on Monday, the euro was changing hands at 1.4536 dollars against 1.4573 dollars late on Friday, at 131.95 yen (132.12), 0.8788 pounds (0.8740) and 1.5128 Swiss francs (1.5123). The dollar stood at 90.73 yen (90.64) and 1.0402 Swiss francs (1.0376). The pound was at 1.6548 dollars (1.6671). On the London Bullion Market, the price of gold fell to 995.17 dollars an ounce from 1,008.25 dollars an ounce late on Friday.