EUR/USD hit 1.2825 during European afternoon trade, the session low; the pair subsequently consolidated at 1.2831, shedding 0.14%.
The pair was likely to find support at 1.2770, Monday’s low and resistance at 1.2888, the high of March 26.
Official data showed that the euro zone unemployment rate rose to an all-time high of 12% in February compared with an original estimate of 11.9% for January, which was revised up to 12%.
A separate report showed that the euro zone’s manufacturing purchasing managers’ index ticked up to 46.8 in March, from a final reading of 46.6 the previous month, still substantially below the 50 mark that separates growth from contraction.
Germany’s manufacturing PMI dropped back into contraction territory, falling to 49 in March from a final reading of 50.3 in February, as new orders fell.
Sentiment on the single currency also remained fragile amid concerns over the potential implications of a bailout for Cyprus.
Investors remained cautious ahead of the outcome of the European Central Bank’s upcoming policy meeting on Thursday.
The ECB was not expected to announce any changes to monetary policy, but investors were awaiting comments from President Mario Draghi at the bank’s post-policy meeting press conference.
The euro was higher against the pound, with EUR/GBP rising 0.28% to 0.8459 and edged lower against the yen, with EUR/JPY slipping 0.08% to 119.70.
Sterling weakened after data showed that the U.K. manufacturing PMI rose to 48.3 in March from 47.9 in February, but came in below expectations for a reading of 48.5.
The weak data added to fears over the risk of a triple-dip recession and fuelled expectations that the Bank of England could restart its asset purchase program as soon as this week.
The U.S. was to release a government report on factory orders later in the trading day.
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