Investing.com -- The dollar rose slightly against the euro on Monday extending gains from late last week, amid stronger than expected U.S. factory order data.
EUR/USD fell 0.0051 or 0.46% to 1.1148 on Monday in U.S. afternoon trading, as the dollar posted mild gains against its European counterpart for the third consecutive session. The pair peaked at a session-high of 1.1224 in European morning trading, before falling to a daily low of 1.1122 on a choppy day of trading.
EUR/USD had been in a holding pattern between 1.05 and 1.10 since mid-March until the euro rallied significantly against the dollar early last week. The pair likely gained support at 1.0858 the low from April 28 and met resistance at 1.1291 the high from May 1.
On Monday, the U.S. Census Bureau said in a monthly report that factory orders for the month of April soared 2.1%, above estimates of a 2.0% gain. Bolstered by a surge in aircraft, motor vehicle and energy equipment orders, the reading posted its first gain in eight months. In March, U.S. factory orders fell slightly by 0.1%, underscoring crashing oil prices and a dip in exports due to the stronger dollar.
Elsewhere, the Federal Reserve of Atlanta's GDP Now model forecast growth of 0.8% for the second quarter, amid a decline in nonresidential structures investment by approximately 20%. The forecasts fall dramatically below consensus estimates of 3.3% for the period. For the first quarter, the Atlanta Fed predicted a paltry gain of 0.2%, in line with actual figures released last week.
The pair remained relatively unchanged following a speech by Chicago Federal Reserve president Charles Evans early on Monday afternoon. Delivering a speech in Columbus, Indiana, Evans reiterated that the Fed should wait until 2016 before it decides to raise its benchmark Federal Funds Rate for the first time in nearly a decade.
“Economic activity appears to be on a solid, sustainable growth path, which, on its own, would support a rate hike soon,” Evans said. "However, the weak first-quarter data do give me pause, and I would like to see confirmation that they are indeed a transitory aberration."
Following the Federal Open Market Committee's April meeting last week, the Fed removed all calendar references to the timing of an interest rate hike, pinning the monetary policy shift on a data-driven approach. Two days later, Federal Reserve of Cleveland president Loretta Mester acknowledged though that June is still on the table for lift off. Evans is favoring a more cautious approach.
“I see significant risks, but few benefits, to increasing interest rates prematurely,” Evans added.
In Europe, Markit said in its Manufacturer's PMI for April that France and Greece produced readings of below 50.0 for the month, demonstrating an accelerated decline in factory production. Germany delivered a final reading of 52.1, above forecasts of 51.9, while Spain and Italy produced readings of 53.8 and 54.2 respectively.
Currency traders await a general election on Thursday to elect the 56th Parliament of the United Kingdom. UK prime minister David Cameron said voters face an "inescapable choice," of voting for him or facing chaos by selecting his opponent Ed Miliband. Cameron has promised a referendum to voters that could enable the UK to eventually leave the European Union.
Also on Monday, EU Commission president Jean-Claude Juncker said Greece must take "major steps," with its international creditors in order to strike a deal to unlock a critical stimulus package. Talks between Greece and its troika of creditors are expected to last through Wednesday in Brussels.