EUR/USD Exchange Rate Steady on Upbeat German Data
The Euro to US Dollar (EUR/USD) exchange rate is holding steady this morning as markets welcomed some upbeat German manufacturing data.
At the time of writing EUR/USD exchange rate is trading at around $1.1087, a modest rise from today’s opening rate.
Euro (EUR) Stable as German Factory Orders Impress
After faltering in the first half of the week, the Euro (EUR) appears to have finally found its feet this morning following the publication of some better-than-expected German industrial data.
According to data published by Destatis, German factory orders surged from -0.4% to 1.3% in September, greatly outstripping forecasts of a modest 0.1% rebound.
#Manufacturing in September 2019: New orders +1.3% seasonally adjusted on the previous month. https://t.co/4t6W4eqRUU pic.twitter.com/buIefeDBiS
— Destatis news (@destatis_news) November 6, 2019
The pick-up in orders was attributed to strong domestic demand as well as orders placed from countries outside the Eurozone.
Destatis, writes:
‘Domestic orders increased by 1.6% and foreign orders rose 1.1% in September 2019 on the previous month. New orders from the euro area were down 1.8%, new orders from other countries increased 3.0% compared to August 2019.’
Germany’s industrial woes have been a source of considerable pain for the Euro in recent months, having given rise to fears that the Eurozone’s largest economy may have slipped into a recession in the third quarter.
Whilst today’s data may not be enough to rule out a recession, it provides a glimmer of hope to EUR investors that the German economy may have finally turned a corner.
US Dollar (USD) Subdued amidst Trade Optimism
The US Dollar (USD) finds itself on the back foot this morning, relinquishing some ground in response to US-China trade optimism.
The two powers are thought to be extremely close to signing off on a ‘phase 1’ trade deal, with recent reports suggesting this could even involve the rolling back some tariffs between the countries.
However while headlines remain broadly positive, analysts remain wary about the prospect of a deal being signed in the short-term.
Gerard Burg, senior economist at National Australia Bank, comments:
‘It appears that the two sides are close to a partial deal after talks in October that could begin to address the issues that ignited the trade war. The situation remains fluid with negotiations apparently continuing ahead of a formal signing of the deal,’
EUR/USD Exchange Rate Forecast: Eurozone Retail Sales Still to Come
Also on the docket for EUR investors today is the publication of the Eurozone’s latest retail sales figures.
These may put some renewed pressure on the Euro to US Dollar (EUR/USD) exchange rate later this morning as economists forecast sales growth will have slowed again in September.
Meanwhile, the focus for USD investors will be on a series of speeches from Federal Reserve policy makers scheduled for later in the day.
Traders will be watching closely for the language used by the Fed members, with the US Dollar potentially facing some headwinds if a general tone of caution prevails.