Investing.com - The euro rose to six-week highs against the dollar on Tuesday after a report showed that manufacturing activity in the New York region fell more sharply than expected this month, adding to concerns that the U.S. economic recovery is losing momentum.
EUR/USD hit 1.3749, the highest since January 2 and was last up 0.28% to 1.3744.
The pair was likely to find support at 1.3693, the session low and resistance at 1.3775.
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, the dollar pared back gains against the yen. USD/JPY was up 0.52% to 102.44, after rising as high as 102.75 earlier.
The yen remained broadly weaker after the Bank of Japan extended a bank lending scheme to boost the effectiveness of its monetary stimulus program at its policy meeting on Tuesday, and left its main policy target unchanged.
The pound backed away from session lows against the dollar, with GBP/USD down just 0.06% to 1.6701, recovering from lows of 1.6656.
Sterling slid earlier after data showed that consumer price inflation in the U.K. fell 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%.