Investing.com

Investing.com - The euro pared losses against the U.S. dollar on Monday, but remained close to four-month lows after data showed that euro zone inflation remained unchanged at a four-and-a-half year low in May, while investors eyed upcoming U.S. manufacturing data.



EUR/USD pulled away from 1.3513, the pair''s lowest since June 12, to hit 1.3538 during European afternoon trade, inching down 0.02%.



The pair was likely to find support at 1.3500 and resistance at 1.3570.



Eurostat reported earlier 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.



Core inflation, which strips out volatile items such as energy and food, was unrevised at 0.7%, matching the record set in March of this year and December 2013.



The European Central Bank targets an annual inflation rate of close to but just under 2%.



Earlier this month the ECB cut rates to record lows and imposed negative rates on commercial lenders for the first time, in order to combat the threat of persistently low inflation in the euro area.



Meanwhile, demand for the safe-haven dollar remained supported as concerns over the ongoing Sunni insurgency in Iraq bolstered safe haven demand, amid fears over the impact of reduced oil supply on global growth.



The euro was steady against the pound, with EUR/GBP dipping 0.04% to 0.7979.



Sterling has strengthened broadly, briefly rising above the 1.70 level against the dollar for the first time since August 2009 on Monday, after Bank of England Governor Mark Carney warned last week that U.K. interest rates could rise sooner than expected.





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