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Forex - Euro pares back gains against dollar after U.S. data

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Shutterstock photo - - The euro pared gains against the U.S. dollar on Monday after data showed that U.S. consumer spending slowed again in January and U.S. manufacturing activity expanded at the slowest pace in 13 months in February.

EUR/USD was last at 1.1196, almost unchanged for the day, off session highs of 1.1240.

The Commerce Department reported that U.S. consumer spending slid 0.2% in February after falling 0.3% in the previous month. Economists had forecast a 0.1% decline.

The report showed that lower gasoline prices continued to weigh on inflation.

Another report showed that U.S. factory activity expanded at the slowest rate in 13 months in February.

The Institute for Supply Management said its manufacturing index fell to 52.9 from 53.5 the month before, falling just short of expectations for a reading of 53.0.

At the same time, official figures showed that U.S. construction spending unexpectedly fell 1.1% in January to an annual rate of $971.4 billion.

The euro remained under pressure as investors turned their attention to the upcoming European Central Bank meeting on Thursday, when it was expected to announce details of its quantitative easing program.

The single currency rose to session highs earlier Monday after official figures showed that the annual rate of euro area consumer inflation declined 0.3% in February, better than forecasts for a drop of 0.4%, and slowing from 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 ticked down to 11.2% in January, down from 11.3% in December. It was the lowest level since April 2012.

The euro held gains against the yen, with EUR/JPY last up 0.40% to 134.43, while USD/JPY advanced 0.44% to 120.10.

The U.S. dollar index, which measures the greenback's strength against a trade-weighted basket of six major currencies, was up 0.18% to 95.46, not far from Friday's one-month highs of 95.54. offers an extensive set of professional tools for the financial markets.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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