Investing.com - The euro edged lower against the dollar on Monday, erasing gains made following stronger-than-forecast data on German business climate, as weak Chinese economic data continued to weigh on market sentiment.
EUR/USD dipped 0.08% to 1.3728, down from session highs of 1.3773.
The pair was likely to find support at 1.3701, Friday’s low and resistance at 1.3811, the high of December 31.
The euro hit session highs against the dollar earlier after German research institute Ifo said its business climate index came in at 111.3 in February, the highest level since mid-2011, up from 110.6 in January. Analysts had expected an unchanged reading.
German firms are benefitting from high export demand the report said, but ongoing concerns over volatility in emerging markets continued to cloud the outlook.
The future expectations component of the index ticked down to 108.3 from 108.9 in January, but was ahead of expectations for a decline to 108.2.
A separate report showed that the annual rate of euro zone inflation came in at 0.8% in January, unchanged from the previous month and slightly higher than the preliminary estimate for 0.7%.
Consumer prices were down 1.1% from a month earlier, in line with forecasts.
Investors remained cautious after data on Monday showed that Chinese home prices fell for the first time in 14 months in January. The data added to fears that the world’s second largest economy is slowing as the government tries to tackle bad loans and weak lenders.
Elsewhere, the euro was lower against the yen, with EUR/JPY sliding 0.13% to 140.62. The common currency was also weaker against the pound, with EUR/GBP down 0.18% to 0.8250.