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Forex - Euro at 6-month highs before GDP data, dollar broadly lower

The euro rose to 6-month highs on Tuesday ahead of the release of euro zone data on first quarter growth, while the U.S. dollar was lower against a currency basket after an unexpectedly weak U.S. manufacturing report.

EUR/USD was up 0.44% to 1.1025 by 07.20 GMT, the strongest level since November 9.

Demand for the euro has been underpinned as investors shifted their attention back to the outlook for monetary policy as concerns over political risks receded after centrist Emmanuel Macron was elected France's president over far-right nationalist Marine Le Pen.

Investors were looking ahead to revised data on euro zone first quarter gross domestic product amid speculation over how soon the European Central Bank could scale back its stimulus program given recent signs of strength in the bloc’s economy.

The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was down 0.34% at 98.48, pressured lower by the stronger euro.

The dollar slipped on Monday after data showing that factory activity New York stateweakened this month, as companies reported a drop in new orders.

The Empire State manufacturing index fell to minus 1, from 5.2 in April, compared to economists’ expectations of a rise to 7.0. It was the first negative reading since October 2016 and added to a recent run of disappointing U.S. economic data.

Against the yen, the dollar was lower with USD/JPY down 0.4% at 113.31.

Meanwhile, sterling was higher ahead of the latest UK inflation report, with GBP/USD up 0.24% at 1.2925.

Economists are expecting that data to show that the cost of living in the UK jumped again in April as the weak pound drives up import costs.