RTTN:Euro Rallies On Upbeat German Factory Orders Data
The European currency edged sharply higher against its major counterparts in early deals on Tuesday following the release of a better-than-forecast German manufacturing orders report.
Germany's manufacturing orders increased from the previous month in March, defying economists' forecast for a modest decline, latest data showed today.
New orders received by German manufacturers increased a seasonally adjusted 2.2 percent sequentially in March, as they did in the previous month, preliminary data from the Federal Ministry of Economics and Technology showed. Economists had forecast orders to fall by 0.5 percent.
Driving the monthly growth in new business, orders in the overseas market climbed 2.7 percent, and domestic orders moved up by 1.8 percent.
Among industrial sub-groups, new works in the intermediate and capital goods industries increased 3.6 percent and 2 percent respectively from the prior month. Meanwhile, orders of consumer goods dropped by 0.7 percent.
Factory orders decreased an unadjusted 0.4 percent compared to March 2012, after dropping 0.2 percent in February this year. Economists had forecast a 2.9 percent fall.
The common currency was rather unmoved on the ECB chief Draghi's remarks yesterday that the central bank is "ready to act again" if it's necessary and will "look at all the data on the euro zone economy in the coming weeks". Last week, the ECB slashed the benchmark interest rate to a historical low of 0.50 percent.
Japanese finance minister Taro Aso said that the Bank of Japan's monetary easing under the leadership of Kuroda has been drastic and it will take time to show the effect of stimulus measures. Aso added that fiscal issues will be the key topic at this week's G7 forum.
Switzerland's jobless rate remained stable at seasonally adjusted 3.1 percent in April, in line with economists' expectation. The number of registered unemployed decreased by 3,142 from the prior month to 135,851 at the end of April.
Switzerland's consumer confidence edged up to -5 in the three months to April from -6 in the preceding three-month period, indicating little change in confidence levels, data from a survey by the State Secretariat for Economic Affairs (SECO) showed today. Economists had forecast the index to rise to -2. The index, however, stayed slightly above its historical average.
The Reserve Bank of Australia unexpectedly cut its benchmark cash rate to a record low to underpin economic growth, toeing in line with its counterpart in Europe, which lowered its key interest rate by a quarter point last week.
The central bank of Australia lowered the official cash rate by 25 basis points to 2.75 percent, effective May 8. Economists had expected the Monetary Policy Board of the Reserve Bank to maintain the rate at 3 percent.
The euro rose back above the key 1.31 level against the US dollar after the upbeat German data, rising as high as 1.3120 around 6:45 am ET. Further bullish extension could help the pair challenge the 1.32 area, a level not seen since May 2.
The common currency climbed to a 12-day high of 1.2340 against the Swiss franc, adding almost 0.6 percent from Monday's close of 1.2271. The near-term resistance for the euro-franc pair is seen around the 1.2350/55 area and a move above this level could set its strongest mark since March 14.
The single currency broke past the key 130.0 level against the yen, rising as much as 130.38 around 7:00 am ET, just a few pips short of yesterday's 2-week high of 130.43. If the euro-yen pair extends advance, it may find resistance around the 130.60/70 area.
The 17-nation bloc currency also advanced to a 5-day high of 0.8456 against the pound, having appreciated almost 0.5 percent from Monday's close of 0.8413. On the upside, the euro-pound pair may find target around the 0.8475 level.
The European shared currency rose to near the 1.29 level against the Australian dollar, rising as high as 1.2895 around 7:00 am ET, its highest level since February 25. The next bullish barrier for the euro-aussie pair above the 1.29 level is seen t 1.2915.
Looking ahead, the U.S. Federal Reserve is due to release its report on outstanding consumer credit for March at 3:00 pm ET. Economists expect outstanding consumer credit to swell by $15 billion from an $18.l billion increase in February.
