Investing.com - The euro remained higher against the U.S. dollar on Monday, as upbeat euro zone economic reports continued to support the single currency, while investors eyed an upcoming report on U.S. manufacturing activity.
EUR/USD hit 1.1240 during European afternoon trade, the pair's highest since February 27; the pair subsequently consolidated at 1.1228, gaining 0.29%.
The pair was likely to find support at 1.1097, the low of January 26 and resistance at 1.1380, the high of February 26.
The single currency strengthened after Eurostat reported that the annual rate of consumer inflation declined 0.3% in February, better than forecasts for a drop of 0.4%, following a 0.6% decline the previous month.
The report said the decline was mostly due to falling energy prices, with service sector prices rising by 1.1% and food, alcohol and tobacco prices increasing 0.5%.
Core inflation, which strips out food and energy costs, was unchanged from January at 0.6%.
Another report showed that the euro zone’s unemployment rate fell to 11.2% in January, down from 11.3% in December. It was the lowest level since April 2012.
But the euro's gains were held in check as investors turned their attention to the upcoming European Central Bank meeting on Thursday, where it was expected to announce details of its quantitative easing program.
The euro was also higher against the pound, with EUR/GBP climbing 0.66% to 0.7296.
In the U.K., data on Monday showed that activity in the factory sector rose to a seven-month high last month, indicating that the economic recovery is picking up after slowing at the end of last year.
The Markit manufacturing purchasing managers’ index rose to 54.1 in February from 53.1 in January. Economists had expected the index to tick up to 53.4.
Later in the day, the Institute of Supply Management was to report on U.S. manufacturing activity.