Investing.com - The dollar rose to two-month highs against the euro on Monday after a recent batch of U.S. data indicated that the economic recovery is strong enough for the Federal Reserve to continue tapering its stimulus program.
EUR/USD hit lows of 1.3508, the weakest since November 25 and was last down 0.02% to 1.3536.
The pair is likely to find support at 1.3500 and resistance at 1.3620, Friday’s high.
Data released on Friday showed that U.S. industrial production rose 0.3% in December, in line with expectations, rising for the fifth successive month.
Another report showed that U.S. building permits rose less-than-expected in December, but remained close to November’s five year highs.
Earlier in the week, data showed that U.S. retail sales posted a larger than expected gain in December.
The data indicated that while the recovery in the U.S. remains uneven, the economic outlook is continuing to improve. The dollar has strengthened broadly since the Fed announced its decision in December to scale back its asset purchase program, cutting it by USD10 million, to USD75 billion-per-month.
The euro remained under pressure amid concerns that the subdued inflation outlook for the euro zone may prompt the European Central Bank to ease monetary policy in order to safeguard the fragile recovery in the region.
Market sentiment found some support after data on Monday showed that China’s economy grew 7.7% in the fourth quarter from a year earlier, slowing from 7.8% in the previous quarter, but still above the 7.6% forecast by economists.
The dollar was slightly lower against the yen, with USD/JPY slipping 0.11% to 104.21.
Elsewhere, the euro hit one-and-a-half month lows against the yen. EUR/JPY hit lows of 140.33, the weakest since December 6 and was last down 0.11% to 141.08.
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