LONDON (AFX) - The euro was lower in quiet early trade on profit-taking after failing to break above parity for the second day running but encouraging US data helped support the dollar, dealers said. "Yesterday's better-than-expected ISM data eased the pressure off the dollar, despite the sell-off in US equities," said Kamal Sharma, currency strategist at Commerzbank. Euro/dollar hit a low of 0.9820 in Asian trading and erosion of the 0.9835 support leaves the market open for a move towards 0.9790, he added. However, Sharma said any short-term correction will not be significant enough to alter his medium-term bearish view on the dollar. Rob Hayward, currency strategist at ABN Amro, also thinks the euro is vulnerable to a move back below 0.98 usd, but attributes the bulk of the decline to profit-taking after failing to break through parity. The markets will also be assessing comments later from European Central Bank president Wim Duisenberg to the European Parliament, as well as euro zone confidence data, said Hayward. Intervention fears pushed dollar/yen higher and confirmation by US Treasury Secretary Paul O'Neill that the Fed intervened on behalf of the Bank of Japan last Friday was generally seen as a "warning sign" for further central bank intervention, according to WestLB currency strategist Michael Klawitter. O'Neill suggested that individual governments should decide whether or not to intervene. Klawitter thinks that the "balance of risks" favour a slight dollar recovery over the next few days, in particular if Thursday's independence day passes by without any terrorist attack. Meanwhile, sterling was little changed on a dearth of data with most market participants focusing on the start of the latest Monetary Policy Committee rate-setting meeting tomorrow.