Enter Layout Mode
Click the text object that contains the date field.
Select a date format that you want from the Inspector's data tab.
This will work as long as all the fields in the text object of the same data type can be set with the same data formatting. That usually is the case for date fields but if you have multiple number fields in the same text object and only some of them should be formatted as currency, this method won't work. So you can select one number format, one date format and one time format for all the merge fields in the same text block, but you can't select one number format for some fields in the object and a different number format for others.
Phil, you're awesome! I've been pulling my hair out on this one. THANKS!!!!