Investing.com - The euro firmed against the dollar on Monday after euro zone inflation data met market expectations, while a disappointing gauge of factory activity in New York state softened demand for the greenback despite a better-than-expected national industrial output figure.
In U.S. trading, EUR/USD was up 0.12% at 1.3931, up from a session low of 1.3880 and off a high of 1.3948.
The pair was likely to find support at 1.3834, Tuesday's low, and resistance at 1.3966, Thursday's high.
Official data earlier revealed earlier that the euro zone's consumer price index rose 0.3% last month, below expectations for a 0.4% increase, after a 1.1% decline in January.
Year-on-year, consumer price inflation rose 0.7% in February, compared to expectations for a 0.8% increase, after a 0.8% gain in January.
However, core consumer price inflation, which excludes food, energy, alcohol, and tobacco, rose 0.5% in February, after a 1.7% fall the previous month and in line with market expectations.
The euro zone's core consumer price index rose 1.0% in February, also in line with expectations.
Monetary authorities pay close attention to core consumer prices when deciding policy.
Meanwhile across the Atlantic, data revealed that U.S. industrial production rose 0.6% in February, exceeding expectations for a 0.1% gain. Industrial production in January was revised to a 0.2% fall from a previously estimated 0.3% decline.
In a separate report, the Federal Reserve Bank of New York said its Empire State manufacturing index ticked up to 5.6 this month, from a reading of 4.5 in February, missing expectations for a rise to 6.0.
Monday's data gave the euro the upper hand over the dollar by allaying recent expectations that the European Central Bank was poised to loosen policy further, still the dollar saw some demand from investors seeking safe-haven from geopolitical issues.
Meanwhile, investors continued to monitor events in Europe, after over 90% of Crimean voters on Sunday chose to break with Ukraine and join Russia. Crimea's Parliament on Monday formally asked to join the Russian Federation.
European Union foreign ministers imposed travel bans and asset freezes on 21 people they have linked to the push to have Crimea secede from Ukraine to maybe be annexed by Russia. U.S. President Barack Obama also imposed sanctions on Russian officials involved in the incursion of Crimea, which included freezing assets in the U.S.
The euro was up against the pound, with EUR/GBP up 0.17% to 0.8372, and up against the yen, with EUR/JPY up 0.40% and trading at 141.59.
On Tuesday, the ZEW Institute is to release its closely watched report on German economic sentiment, a leading indicator of economic health.
The U.S. is to produce data on consumer inflation, in addition to reports on building permits and housing starts.