Investing.com - The euro erased gains against the U.S. dollar on Friday, dropping to nearly one-month lows after the release of relatively positive U.S. inflation data and as investors awaited comments by Federal Reserve Chair Janet Yellen later in the day.
EUR/USD pulled away from 1.1208, the pair's highest since May 19, to hit 1.1011 during U.S. morning trade, retreating 0.90%.
The pair was likely to find support at 1.0958, the low of April 29 and resistance at 1.1208, the session high.
In a report, the Department of Labor said that the U.S. consumer price index rose 0.1% in April, in line with expectations and after a 0.2% gain the previous month.
Year-on-year, consumer prices slipped 0.2% last month however, compared to expectations for a 0.1% downtick, following a 0.1% fall in March.
The core consumer price index, which excludes food and energy, rose 0.3% in April, exceeding expectations for a 0.2% increase, after a 0.2% gain the previous month.
The report came after a string of downbeat U.S. data on Thursday had fuelled fresh uncertainty over the strength of the economy.
The single currency found support earlier, after the Ifo Institute said that its German business climate index ticked down to 108.5 this month from 108.6 in April, compared to expectations for a decline to 108.3.
The euro also strengthened after European Central Bank President Mario Draghi said at a conference in Portugal that the ECB's policies have helped the euro zone's economy to recover.
"The economic outlook for the euro area is brighter today than it has been for seven long years. Monetary policy is working its way through the economy. Growth is picking up. And inflation expectations have recovered from their trough," he said.
However, concerns over a possible Greek default persisted after late-night negotiations between Greek, French and German government leaders ended without any sign of a breakthrough that will unlock bailout funds.
German Finance Minister Wolfgang Schaeuble said on Friday that Greece may have to invent a "parallel currency" if progress stalls in negotiations with the country's European creditors.
The euro was higher against the pound, with EUR/GBP rising 0.24% to 0.7112.