Investing.com - The euro rose to six-week highs against the dollar on Tuesday after a report showing that manufacturing activity in the New York region fell more-than-expected this month fuelled concerns that the U.S. economic recovery is losing momentum.
EUR/USD hit 1.3770, the highest since January 2 and was last up 0.38% to 1.3758.
The pair was likely to find support at 1.3693, the session low and resistance at 1.3811.
The dollar weakened after the Federal Reserve Bank of New York said that its general business conditions index came in at 4.48 this month, down from a 20-month high of 12.51 in December. 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.
A series of soft U.S. economic data has prompted some investors to wonder whether the Federal Reserve will slow the pace of reductions to its asset-buying stimulus program.
The common currency shrugged off a report showing that the closely watched ZEW index of German economic sentiment deteriorated unexpectedly in February, amid concerns over the outlook for the U.S. economic recovery and fears over turbulence in emerging markets.
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.
Elsewhere, EUR/JPY rose to 141.03 on Tuesday, the highest since January 29, and was last up 0.78% to 140.78.
The yen weakened broadly after the Bank of Japan extended a bank lending scheme in an attempt to boost the effectiveness of its monetary stimulus program.
The BoJ decided to double part of a growth lending program at its monthly meeting and said individual banks could borrow twice as much as previously under a second facility.
The common currency was also higher against the pound, with EUR/GBP rising 0.40% to 0.8232.
Sentiment on sterling remained subdued after data showed that consumer price inflation in the U.K. fell back below the Bank of England’s 2% target for the first time since November 2009 in January.
The Office for National Statistics said consumer price inflation accelerated at a rate of 1.9% last month, down from 2.0% in December. Analysts had expected consumer price inflation to remain unchanged last month.
Consumer prices fell 0.6% in January from a month earlier, compared to expectations for a decline of 0.5%.