News Column

Euro Falls After German Factory Orders Decline More-than-forecast

July 4, 2014

CANBERA (Alliance News) - The euro weakened against most major currencies in early European deals on Friday, after data showed that German factory orders fell more-than-forecast in May as both domestic and foreign orders decreased from last month.

The provisional data from Destatis showed that Germany's new manufacturing orders fell by seasonally adjusted 1.7% month-on-month in May. Economists had forecast a 1.1% fall in new orders after rising revised 3.4% in April.

The euro was also weighed by comments from the European Central Bank President Dragi that the key interest rates will remain at present levels for an extended period of time in view of the current outlook for inflation.

In the press conference post ECB meet on Thursday, Draghi told that the ECB is ready to deploy "unconventional measures," if it appears likely that the Eurozone's annual rate of inflation would remain low for longer than it had expected.

The President gave details of the targeted longer-term refinancing operations, or TLTROs, announced in June. Under the plan, financial institutions can borrow money from the ECB, totaling 7% of their total loans to households and the non-financial private sector.

The euro that ended Thursday's trading at 1.4556 against the aussie slipped to 1.4517. The next possible support for the euro-aussie pair lies around the 1.436 zone.

After moving broadly sideways in the Asian session, the euro edged down to 1.3597. On the downside, 1.35 is seen as next possible support level for the euro.

The euro depreciated by 0.2% to 0.7918 against the pound for the first time since September 2012. At yesterday's close, the pair was worth 0.7932. If the euro continues slide, it may find support around the mark.

The single currency slipped to a 2-day low of 138.75 against the yen, down by 0.2% from Thursday's closing value of 139.07. Next key downside target for the euro-yen pair is seen around the 137.00 mark.

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Source: Alliance News

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