Investing.com - The euro pushed higher against the dollar on Monday, easing back from almost four month lows, but gains looked likely to remain limited after the European Central Bank eased monetary policy earlier this month.
EUR/USD was up 0.16% to 1.3561, holding above the four month trough of 1.3502 struck on June 5.
The pair was likely to find support at 1.3500 and resistance at 1.3570.
Official data on Monday confirmed that the annual rate of inflation in the euro zone remained unchanged at a four-and-a-half year low in May.
Eurostat reported that the monthly rate of inflation in the euro zone fell 0.1% in May, in line with forecasts, while the annual rate of inflation was 0.5%, unchanged from the preliminary estimate.
It was the lowest annual rate of inflation since November 2009, with the exception of March of this year. The ECB targets an annual inflation rate of close to but just under 2%.
The euro has weakened broadly since the ECB cut rates to record lows and imposed negative rates on commercial lenders for the first time earlier this month, in order to combat the threat of persistently low inflation in the euro area.
In the U.S., data on Monday showed that manufacturing activity in the Empire state expanded more quickly than forecast in June, while a separate report showed that industrial production rose more than expected in May.
The Federal Reserve Bank of New York said that its general business conditions index increased to 19.28 this month from a reading of 19.01 in May. Analysts had expected the index to decline to 15.0.
U.S. industrial production rose by a seasonally adjusted 0.6% last month, above forecasts for a 0.5% gain.
Meanwhile, the International Monetary Fund cut its forecast for U.S. economic growth this year on Monday, saying that the unusually harsh winter, along with the “still-struggling housing market” would act as a drag on growth.
The IMF said it now expects the U.S. economy to expand 2% this year, down from its forecast of 2.8% in April.
Investors also remained cautious as concerns over the ongoing Sunni insurgency in Iraq continued to support safe haven demand, amid fears over the impact of reduced oil supply on global growth.
The euro was steady against the yen, with EUR/JPY at 138.16, not far from the four month low of 137.71 set late last week.