Euro Gains Against Dollar On German Factory Data and Other Top Forex News
The euro was up against the dollar on Tuesday after German factory data came in much stronger than expected. It was a rare piece of good news for the eurozone after a string of disappointing data in recent weeks has led to a weakening of the single currency. New orders received by German manufacturers increased by a seasonally adjusted 2.2% in March. Economists had forecast orders to fall by 0.5%.
The gains were limited however, as the market was still trying to digest yesterday’s comments by European Central Bank President Mario Draghi, that more rate cuts are possible if economic indicators worsen. But Camilla Sutton, chief currency strategist at Scotiabank in Toronto, believes the euro is better supported than the dollar in the near term because the ECB is not engaged in the type of aggressive monetary stimulus the Fed has undertaken.
During the U.S. session, EUR/USD finished the day trading up 0.07% at 1.3084, up from a session low of 1.3069 and off from a high of 1.3133.
More Coverage of the Day’s Top Story
- DailyFX: Euro rebound to Fizzle- EU calls for more ECB support. The Euro advanced to a high of 1.3130 as German Factory Orders unexpectedly increased another 2.2% in March. However, it seems as though the governments operating under the single currency are becoming increasingly reliant on monetary support as Spanish Prime Minister Mariano Rajoy calls upon the European Central Bank (ECB) to introduce additional programs to help finance small businesses, while Euro Group President Jeroen Dijsselbloem said the region needs tools to recapitalize commercial banks as the ECB plans to conduct asset-quality review of financial institutions.
- Forex News: Why EUR refuses to fall. – Once again, the euro is trading higher this morning despite the attempts of European policymakers to jawbone the currency. ECB member Weidmann said today that they must work to improve the competitiveness of the Eurozone as a whole and two ways to achieve this goal would be through easier monetary policy and a weaker currency. Since last week’s central bank meeting, policymakers have used every opportunity to make it clear that they are committed to increasing stimulus again if economic data continues to weaken and yet the euro refuses to fall.
- Investing.com: Gold drops as German data sparks demand for U.S. equities. – Gold prices dropped in U.S. trading on Tuesday after German factory data came in much stronger than expected and sent investors opting for U.S. equities in a risk-on trading session.
More Top Stories:
FT: Australian dollar slumps after rate cut. – The Australian dollar slumped on Tuesday morning after the Reserve Bank of Australia unexpectedly eased monetary policy in an effort to fight the currency’s strength and the economy’s weaknesses.
DR Duru: A mystifying rate cut by the Reserve Bank Of Australia. – This morning, the Reserve Bank of Australia cut its interest rate to 2.75% whereas the consensus assumed that rates would stay steady at 3.0%. While the market has priced in rate cuts for later this year, I find myself mystified by the timing and context of this latest rate cut. The RBA’s latest statement on monetary policy says almost nothing new and does not point to a single locus of economic danger to justify another cut.
CBC News: Loonie nudges towards parity. – Despite widespread market sentiment that the Canadian dollar is overvalued and overdue for a fall, the loonie continues to move higher against its U.S. counterpart and is within spitting distance of returning to parity.
Reuters: Long-term investors bet on commodity currencies falling. – The Australian, Canadian and New Zealand dollars may be set for a decline, dragged down by a slowdown in China and a sharp fall in commodity prices.
Marc Chandler: Full liquidity returns, dollar yawns. – The end of Golden Week, May Day, and bank holiday has not meant fresh movement for the dollar, which has been confined to narrow ranges against most of the major currencies. The main exception has been the Australian dollar which has been sold to fresh two month lows in response to the RBA’s 25 bp rate cut.
MarketWatch: Gold futures fall more than $20 an ounce. – Gold futures lost more than $20 an ounce Tuesday as outflows from gold exchange-traded funds continued to weigh on sentiment. Prices for gold also failed to get a lift from news of another round of global easing, this time from Australia.
Market Pulse: USD/JPY – Rangebound trading continues. – USD/JPY is steady in Tuesday trading, as the pair trades in the low-99 range in the European session. In Japan, there are no releases scheduled on Tuesday. Over in the US, it is another quiet day, with two minor releases, as well as a speech from Treasury Secretary Jack Lew.
Investing.com: GBP/USD pushes lower in quiet trade. – The pound pushed lower against the U.S. dollar in quiet trade on Tuesday, as markets were jittery amid expectations for further rate cuts by the European Central Bank, while optimism over the outlook for the U.K. economy continued to support sterling.