Markets | Mon Apr 27, 2015 3:59am EDT

LONDON

The dollar steadied in the lower half of an increasingly intransigent range on Monday, after sliding late last week following another round of disappointing U.S. economic data.

The run of poor numbers -- put down by most economists so far to the weather -- has lengthened the latest pause in the U.S. currency's rally to almost seven weeks and brought "long" bets on further gains to their lowest since September [IMM/FX].

While that is some reflection of a dip in conviction over the scale of any further gains by the greenback, it also means there is more room in trading books for investors to bet on it again.

Of crucial interest this week will be the U.S. Federal Reserve's attitude to the economic numbers.

"The real problem last week was the lack of anything new to go on, which probably left us more exposed to the potential for a correction on the dollar," said Ian Stannard, European head of FX strategy at Morgan Stanley in London.

"It may be that the market is looking to get back into dollar longs and I think the extent to which the Fed is prepared to look through this weaker patch of data will be the important element this week."

The dollar was buying 118.15 yen, down about 0.1 percent on the day and well below last week's high of 120.10 yen. It was virtually unchanged at $1.0869 per euro.

"I think the range-bound trading will be continuing for the dollar/yen, with the upside at 120 and the downside at 118," said Kaneo Ogino, director at Global-info Co in Tokyo, a foreign exchange research firm.

The Bank of Japan also meets on Thursday, following the Fed's Wednesday statement, and is widely expected to hold policy steady. The policy decision, however, might be influenced by the median inflation forecast produced at the meeting.

While the possibility is slim, BOJ policymakers may opt to ease if the cut to this fiscal year's inflation forecast is unexpectedly big, or if they feel the slowdown in inflation is damaging enough to warrant pre-emptive action.

Data on Friday showed U.S. business investment spending plans fell for a seventh straight month in March, suggesting the economy was struggling to rebound.

The weak figures sent the dollar index, which tracks the greenback against a basket of six major rivals, to a nearly three-week low of 96.755 on Friday. By 0745 GMT, it stood at 96.982, edging up about 0.1 percent on the day.