LONDON — The euro fell on Wednesday after news of falling German industrial orders, and the dollar was bolstered further by its safe-haven status amid more downbeat US data.
Trade was somewhat muted ahead of monetary policy decisions from both the European Central Bank (ECB) and the Bank of England (BoE) on Thursday.
In late morning deals, the euro slid to 1.2575 dollars from 1.2623 dollars late in New York on Tuesday.
Against the Japanese currency, the dollar retreated to 87.09 yen from 87.47 on Tuesday.
Orders placed with German industry, a pivotal exporting force in the eurozone, fell unexpectedly in May by 0.5 percent, official data showed.
The fall from the level the previous month spotlights the risk of a "double-dip" recession in the 16-nation eurozone amidst tough austerity drives by governments to correct public finances.
Analysts polled by Dow Jones Newswires had forecast an increase of 0.5 percent in May following what was initially said to be a rise of 2.8 percent in April.
"The market reaction to German numbers was limited ahead of tomorrow's ECB policy meeting but the negative surprise may prevent the euro from rebounding strongly in the near term," said Credit Agricole CIB analyst Frederik Ducrozet.
The result in Europe's biggest economy will likely fuel concern over the possibility of a "double dip" recession for the 16-nation eurozone.
The eurozone economy grew by a slight 0.2 percent in the first quarter of 2010, official European Union data showed on Wednesday, before the main thrust of tough spending cuts begins to bite across the crisis-hit bloc.
Growth across the wider 27-nation EU, which includes Britain and Poland, was also 0.2 percent between January and March compared to the previous quarter, according to the Eurostat statistics agency.
The US dollar also won support on Wednesday as investors sought safety amid fresh concerns about the US economic recovery, traders said.
The Institute of Supply Management (ISM) said Tuesday that the US services sector had suffered a sharper-than-expected slow-down in growth in June.
The ISM's non-manufacturing index declined to 53.8 points from 55.4 in May. Most economists had expected the June figure to be 55.0 after relatively steady readings in the previous three months.
Any number above 50 percent indicates growth in the sector, which accounts for more than two thirds of US economic activity.
"Further evidence that the economic rebound in the US is losing momentum led to muted demand for the dollar as a safe-haven currency," added TorFX analyst Hannah Wilson.
In trading in London on Wednesday, the euro was at 1.2575 dollars against 1.2623 dollars on Tuesday, at 109.41 yen (110.43), 0.8326 pounds (0.8329) and 1.3341 Swiss francs (1.3372).
The dollar stood at 87.09 yen (87.47) and 1.0619 Swiss francs (1.0598).
The pound was at 1.5090 dollars (1.5152).
On the London Bullion Market, the price of gold fell to 1,187.75 dollars an ounce from 1,195 dollars an ounce on Tuesday.
