Investing.com - The euro firmed against the greenback on Tuesday as investors avoided the dollar after a less-than-stellar economic barometer for the New York area disappointed investors.
In U.S. trading, EUR/USD was trading at 1.3756, up 0.36%, up from a session low of 1.3695 and off a high of 1.3770.
The pair was likely to find support at 1.3592, Monday's low, and resistance at 1.3724, Monday's high.
The dollar weakened after the Federal Reserve Bank of New York said that its general business conditions index came in at 4.48 for February, down from a 20-month high of 12.51 in January. Analysts had expected the index to decline to 9.00.
The new orders index fell to zero from a two-year high of 11 last month.
The numbers were the latest in a series of soft U.S. economic indicators that have prompted many investors to wonder whether the Federal Reserve will slow the pace of reductions to its asset-buying stimulus program.
The Fed is currently buying USD65 billion in bonds a month to suppress interest rates to spur recovery, which weakens the dollar as a side effect.
The euro, meanwhile, shrugged off a report showing that the closely watched ZEW index of German economic sentiment slid unexpectedly in February.
The ZEW Centre for Economic Research said that its index of German economic sentiment came in at 55.7 this month, down from 61.7 in January. Analysts had expected an unchanged reading.
However, the current conditions index improved to two-and-a-half year highs of 50.0 this month from 41.2 in January, beating expectations for an increase to 44.0.
The euro was up against the pound, with EUR/GBP gaining 0.46% to 0.8238, and up against the yen, with EUR/JPY trading up 0.77% at 140.78.
Both the yen and the pound saw headwinds on Tuesday.
The yen weakened against the dollar and the euro on Tuesday after the Bank of Japan decided to double part of a growth lending program at its monthly policy meeting, and said individual banks could borrow twice as much as previously under a second facility, in an attempt to boost the effectiveness of its monetary stimulus program.
Meanwhile in the U.K., official data revealed that consumer price inflation accelerated at a rate of 1.9% last month, down from 2.0% in December. Analysts had expected consumer prices to remain unchanged.
Consumer prices fell 0.6% in January from a month earlier, compared to expectations for a decline of 0.5%.
On Wednesday, the U.S. is to publish reports on building permits, housing starts and producer price inflation.
Meanwhile, the Federal Reserve is to publish the minutes of its most recent policy setting meeting.