The euro’s rally from earlier this morning ran out of steam after the morning’s data releases included a sharp expansion in German factory orders and a lower-than-expected improvement in investor confidence in the eurozone.
- Factory orders in Germany surged by 10.4% month-on-month in May from a revised -26.2% in April but remained well below the consensus of a 15.4% increase. This indicates that demand in German manufacturing recovered some ground as containment measures were lifted and the economy was gradually reopened, but the increase was lower than the consensus expected. New orders are still under pressure – demand and output may be rebounding, but the increase is small compared to the major drag on demand in the previous two months to begin with.
- Investor confidence rose from -18.2 in July from -24.8 in June, where a reading of -10.9 was expected. The reading likely reflects the expectations of investors that a gradual economic recovery is in sight, but there has not been much improvement in the longer-term outlook since the previous data release.
EURUSD slows down after improved but below consensus data from the eurozone
Ima Sammani, Junior FX Market Analyst