NEW YORK?The dollar slid against the euro on Monday as confidence in the eurozone returned thanks to solid bank earnings and manufacturing data.

The euro rose to $1.3179 in New York at 2140 GMT, from $1.3054 late Friday.

"The dollar lost ground," said Brian Kim of UBS, describing "solid" European manufacturing statistics for July as one driver.

The euro surpassed $1.31, as soaring stock markets encouraged players to take on more risk in the higher yielding single currency.

HSBC and BNP Paribas earlier reported solid earnings, in a sector that has been in the doldrums thanks to Greece's fiscal crisis.

But there were doubts about how long the euro rally would last, with Kim linking previous euro weakness to the manufacturing increase.

"The boost that Eurozone exporters have received from the earlier euro depreciation should wane as the exchange rate stabilizes," said Kim.

Others also pointed to a slowing euro surge.

"While we believe positive market sentiment has further to run, we remain suspicious of euro's gains against the dollar," said Vassili Serebriakov, a currency strategist at Wells Fargo Bank.

"The current 'firm patch' in the eurozone economic data will be difficult to sustain against the backdrop of fiscal austerity, while we also see the recent pessimism on the US economy as becoming somewhat overdone."

The dollar dropped slightly against the Japanese currency, to 86.44 yen from 86.47 Friday.

Against other key currencies, the dollar fell to 1.0391 Swiss francs from 1.0412, while the British pound rose to $1.5891 from $1.5689.