Home Daily Commentaries German factory orders significantly worse than expectations

German factory orders significantly worse than expectations

Daily Currency Update

German factory orders fell 11.7% month-on-month vs. a drop of only 4.0% expected in July. This reading is yet another that many are viewing as cracks appearing in the Eurozone overall. French inflation rose in August after a drop for three consecutive months. The rise comes from higher energy prices and was posted at 4.8% compared to 4.3% in July. Comparatively, Italian inflation dropped to 5.5% from 5.9% in July. Overall, regions in the Eurozone seem to be affected differently/lagging compared to other regions adding more difficulty to the ECB’s decision moving forward.

EURUSD remains defensive above 1.07 with eyes on EU retail sales and US services PMI out later today. UOB Group strategists believe that EURUSD could crop down to 1.0635 in the coming few weeks. They also have stated that GBPUSD could breach below 1.2500 in the near term

Key Movers

EU retail sales and US services & composite PMIs are the key movers today, EU retail sales are expected to decrease slightly from the prior month whereas, US PMIs are forecast to remain the same at 51.0 and 50.4 respectively.

The Bank of Canada is due to release its decision on interest rates later this afternoon. Currently, the overnight lending rate is at 5.0% and the consensus is that the central bank will leave rates unchanged.

Expected Ranges

  • GBP/USD: 1.2525 - 1.2650 ▲
  • GBP/EUR: 1.1660 - 1.1750 ▲
  • GBP/AUD: 1.9525 - 1.9755 ▼
  • EUR/USD: 1.0635 - 1.0800 ▲