Investing.com -- EUR/USD surged above 1.15 for the first time since the August flash crash on Monday, as soft monthly manufacturing data in the U.S. pushed the dollar to fresh 8-month lows.
The currency pair traded in a broad range between 1.1448 and 1.1536, before settling at 1.1530, up 0.0070 or 0.59% on the session. The euro has closed higher against the dollar in each of the last seven sessions and 10 of the last 13. Over the last month, the euro has gained more than 1.2% against its American counterpart.
EUR/USD likely gained support at 1.0538, the low from December 3 and was met with resistance at 1.1713, the high from Aug. 24.
The dollar remained at its lowest levels since last summer on Monday, as the slumping manufacturing sector showed little signs of improving. On Monday morning, the Institute for Supply Management (ISM) said its Manufacturing Index for the month of April fell 1.0 to 50.8, below consensus forecasts for a reading of 51.4. Within the report, supplier deliveries plunged 1.1 points, underscoring low inventory levels throughout the sector and dragging down the composite index. New orders also slowed by 2.5%, while employment remained in contraction despite a gain of 1.1 points.
The U.S. Dollar Index, which measures the strength of the greenback versus a basket of six other major currencies, fell more than 0.55% to an intraday low of 92.52, before settling near session-lows at 92.53. At one point, the index fell to its lowest level since last July. Over the last six sessions, the dollar has tumbled more than 2.5%.
As a result, the yen rose to fresh 18-month highs against the dollar at ¥106.16 as investors continued to digest broad signals that the Bank of Japan will not intervene in global foreign exchange markets in the coming weeks to weaken its currency. Last Thursday, the BOJ rattled global markets with a surprising decision not to implement further easing measures in an effort to stave off deflation.
One day earlier, the Federal Reserve left its benchmark interest rate unchanged at its April's monetary policy meeting. The Federal Open Market Committee (FOMC) has left interest rates steady in each of its three meetings this year. At the meeting, the Fed also indicated that it will remain data dependent with the timing of future interest rate decisions. Any interest rate hikes by the Fed this year are viewed as bullish for the dollar, as investors pile into the greenback in order to capitalize on higher yields.
In the euro area, Markit's Manufacturing PMI index for April ticked up 0.2 to 51.7, above analysts' expectations for slight gains to 51.6. Elsewhere, European Central Bank president Mario Draghi fired back at critics of the central bank's easy monetary policies at a closely-watched speech in Frankfurt. Draghi, who has come under attack from senior officials in Germany since the ECB ramped up its €1.5 trillion asset-purchasing program in March, emphasized that low interest rates are the result of an underlying economic problem and that investors in Germany should respond by developing diversified savings patterns comparable to their counterparts back in the U.S. At a ceremony organized by a top euro area think-tank in early-April, German Wolfgang Schäuble blamed the ECB's ultra-low rates for causing undue harm on the nation's savers.
"Those advocating a lesser role for monetary policy or a shorter period of monetary expansion necessarily imply a larger role for fiscal policy," Draghi said.
The euro has gained more than 3% against the dollar since the ECB approved a wide range of stimulus measures on March 10.