High-flying euro pushes down European shares

The euro hit a 23-month high on Monday against an ailing dollar, weighing on shares of European exporters before weaker-than-expected German business activity took the shine off the single currency. 

The euro touched $1.1684 in Asian trade before pulling back to trade at $1.1648, down 0.2 percent on the day. It hit a low for the day of $1.1638 after preliminary data showing German private sector growth slowed more than expected in July. 

The euro's strength helped push the dollar - hamstrung by political uncertainty in Washington - to its lowest in 13 months against a basket of major currencies. 

The euro has risen in recent weeks on expectations the European Central Bank will before long begin to scale back its bond-buying monetary stimulus scheme. 

On Friday, the day after an ECB policy meeting, four sources with direct knowledge of the discussions said policymakers saw October as the most likely date to decide whether to claw back stimulus. 

European shares fell on Monday. The exporter-dominated German DAX index dropped 0.2 percent. The pan-European STOXX 600 index was down 0.1 percent, after falling 1 percent on Friday as the strong euro weighed on earnings. 

German government bond yields edged lower after euro zone business activity data also came in below forecasts. 

The 10-year yield - the benchmark for euro zone borrowing costs - fell to 0.49 percent, down 0.4 basis points and its lowest in more than a week. Yields fell on Friday as the strong euro led investors to question the timing of when the ECB would begin to withdraw its stimulus.