Investing.com - The dollar edged higher against the euro on Monday after investors spent the weekend digesting Friday's July jobs report and concluded the numbers point to an improving labor market even though the data missed expectations.
In U.S. trading, EUR/USD was down 0.07% at 1.3419, up from a session low of 1.3416 and off a high of 1.3433.
The pair was likely to find support at 1.3367, last Wednesday's low, and resistance at 1.3445, Friday's high.
The Labor Department reported Friday that the U.S. economy added 209,000 jobs in July, missing expectations for an increase of 233,000, though July marked the sixth consecutive month that the U.S. economy created over 200,000 new payrolls.
The report also showed that the U.S. unemployment rate ticked up to 6.2% last month from 6.1% in June. Analysts had expected the rate to remain unchanged in July, though the number indicated that more unemployed Americans were entering the labor force in search of work, a positive sign.
The unemployment rate does not include discouraged unemployed people who have given up actively searching for work, so a decision by many to look for jobs can send the headline rate higher.
The dollar softened initially the report, though it regained strength by Monday trading after investors concluded that the economy continues to recover and bolster the labor market along with it.
Still, investors also spent the day reexamining how much time will pass from when the Federal Reserve will wind down its bond-buying stimulus program and when it will begin hiking benchmark interest rates, which watered down the greenback's gains.
While the economy is improving, the Fed noted in its July statement on interest rates this week that slackness in the labor market still concerns monetary authorities.
Meanwhile across the Atlantic, the single currency softened on Monday as investors looked ahead to the conclusion of the ECB’s monthly monetary policy review later in the week.
Data late last week showed that the annual rate of inflation in the euro area slowed to 0.4% in July from 0.5% in June, adding to pressure on the bank to implement further easing measures to avert the risk of deflation in the region.
Elsewhere, the euro was down against the pound, with EUR/GBP down 0.20% at 0.7968, and down against the yen, with EUR/JPY down 0.19% at 137.51.
On Tuesday, the euro area is to release data on service-sector activity as well as retail sales.
The U.S. will unveil service-sector activity data as well as a report on factory orders.