Investing.com

Investing.com - The euro edged up to session highs against the dollar on Monday, after revised data showed that the euro zone’s manufacturing sector continued to recover in January.



EUR/USD hit session highs of 1.3568 and was last up 0.17% to 1.3512. The pair fell to lows of 1.3478 on Friday, the weakest since November 22.



The pair was likely to find support at 1.3440 and resistance at 1.3570.



The euro found support after data released on Monday showed that the euro zone’s manufacturing purchasing managers index rose to a 32-month high of 54.0 in January, up from 52.7 in December and a shade higher than the preliminary estimate of 53.9.



The pick-up was attributed to a rise in in new orders, leading to a higher backlog of work and increased job creation across the sector.



Germany saw strong growth, with its manufacturing PMI rising to a 32-month high of 56.5, up from the preliminary estimate of 56.3. However, France continued to lag with its manufacturing PMI rising to a four-month high of 49.3, remaining below the 50 level that separates contraction from expansion.



All of the euro zone’s peripheral countries reported an increase in manufacturing activity in January, with Greece returning to growth for the first time since August 2009.



The euro’s gains were held in check after data last week showing that inflation in the euro zone slowed in January fuelled fears that the European Central Bank may tighten policy to stave off the risk of deflation.



The euro rose to one-week highs against the pound after data showed that the U.K. manufacturing sector expanded at the slowest rate in three months in January. EUR/GBP hit highs of 0.8278 and was last up 0.75% to 0.8268.



The U.K. manufacturing PMI came in at 56.7 for January, down from 57.2 in December and below estimates for a reading of 57.0.



Although the rate of the expansion was the slowest in three months the index was still well above the series average of 51.3, indicating that the economy had a strong start to the year.



The euro slid to two-month lows against the yen as fears over a crisis in emerging markets and concerns over a possible slowdown in China continued to underpin safe haven demand.



EUR/JPY hit lows of 137.35, the weakest since November 26 and was last down 0.24% to 137.40.



Elsewhere, the dollar also hit two-month lows against the yen, with USD/JPY down 0.29% to 101.71.



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