The euro experienced a decline against the dollar on Friday after Germany reported a sharp drop in factory orders. This news has intensified concerns regarding the health of the Eurozone’s economic powerhouse.
According to data released by the German Statistics Office, factory orders fell by 1.3% in June, confounding expectations of a rise. This decline has fueled worries about the sustainability of the Eurozone’s recovery.
“The German factory orders data was certainly weaker than expected, and this has weighed on the euro,” said a currency strategist at a major bank. “The market is now looking for further confirmation, or denial, of this weakness in upcoming data releases.”
The euro fell to a session low of $1.3265 following the release, before recovering slightly. However, analysts suggest that the currency remains vulnerable to further downside pressure if upcoming Eurozone data disappoints.
Investors are now focusing on the upcoming release of German industrial production figures and Eurozone GDP data for further clues about the region’s economic trajectory.
Key Factors Influencing the Euro:
- German economic data
- Eurozone GDP growth
- ECB monetary policy
The dollar, meanwhile, has benefited from recent positive economic data in the United States, which has raised expectations that the Federal Reserve may begin to taper its asset purchase program sooner than previously anticipated.
