SINGAPORELONDON, Sept 30 Reuters The euro strengthened on Monday after German inflation data, while commodity currencies rose on hopes for a turnaround in China39;s economy and the Japanese yen steadied as traders reacted to the new prime minister39;s call for a snap election.

The dollar, which was hovering near a oneyear low against a basket of peers, will be shaped by nonfarm payrolls data on Friday that will give the latest indication on the health of the U.S. economy, and the scale of rate cuts required in the next few months.

Expectations of significant U.S. monetary easing this year, which the Federal Reserve met with a recent 50basispoint rate reduction, have sent the dollar lower against most majors in recent weeks.

The euro was at 1.1194, up 0.25 on the day, and strengthening a fraction after German state data suggested that national inflation was easing, though not as significantly as last week39;s figures from France and Spain.

The currency was steady on the day against the pound at 83.43 pence, but languishing around twoyear lows.

That French and Spanish data price data, along with the latest signs of weak economic growth, caused several big investment banks to change their European Central Bank calls last week to include an October rate cut as well as the widely expected December move.

That meant the European common currency has weakened against most peers, and held steady against the U.S. dollar, despite Chinese economic stimulus measures that would…