Investing.com - The euro was little changed near 5-week highs against the dollar on Tuesday after the Institute for Supply Management reported that the U.S. manufacturing sector expanded at a slower than expected rate last month.
EUR/USD was at 1.3688, not far from the five-week high of 1.3698 set on Monday.
The pair was likely to find support at 1.3640 and resistance at 1.3725.
The dollar showed little reaction after the ISM said its manufacturing PMI ticked down to 55.3 last month from 55.4 in May. Analysts had expected an increase to 55.8.
Another report showed that the final reading of the Markit U.S. manufacturing PMI rose to 57.3 in June, the highest reading since May 2010. The report showed the fastest growth in output and new orders since April 2010.
Meanwhile, the Commerce Department said construction spending rose 0.1% in May, below the expected 0.5% increase.
The greenback has come under pressure since data last week showing a 2.9% economic contraction in the first quarter bolstered expectations that the Federal Reserve will keep rates on hold for an extended period.
Speaking Monday, San Francisco Fed President John Williams underlined this view, saying the bank will probably need to hold interest rates near zero for at least another year, despite signs that the economy is improving.
Investors were turning their attention to the U.S. nonfarm payrolls report, due to be released one day early on Thursday ahead of the Independence Day holiday, for further indications on the strength of the labor market.
Demand for the euro continued to be underpinned despite data on Tuesday indicating that the manufacturing recovery in the euro area is losing momentum.
Revised data showed that the euro zone’s manufacturing PMI dipped to a seven-month low of 51.8 in June from 52.2 in May. Growth in the German factory sector slowed to an eight month low, while the French manufacturing index fell to a six-month low.
A separate report showed that the region’s unemployment rate ticked down to 11.6% in May, revised from the initial reading of 11.7%.
The dollar edged higher against the yen, with USD/JPY rising 0.15% to 101.48, holding above Monday’s six-week low of 101.22.
The shared currency pushed higher against the yen, with EUR/JPY easing up 0.13% to 138.90.