The Euro to US Dollar (EUR/USD) Exchange Rate dropped close to its lowest-level in a week on Friday due to the release of disappointing German factory orders data.
The Euro slipped on Thursday after the European Central Bank (ECB) chose to leave interest rates unchanged at the record low level of 0.15% and as comments made by ECB President Mario Draghi dented sentiment towards the currency.
Mr Draghi suggested that the low interest rate will remain in place for an extended period of time and said that the Eurozone economy still faces challenges. He also emphasised that ‘the governing council is also unanimous in its commitment to use unconventional instruments if necessary, to address the risk of too-prolonged period of low inflation,’ the dovish comments did little to support the single currency.
Friday’s data out of Germany showed that factory orders in the Eurozone’s largest economy fell more than forecast in May.
According to Germany’s Economy Ministry, orders dropped by 1.7% from April. The decline was more than the 1.1% fall forecast by economists.
Despite the fall economists were largely upbeat regarding the outlook of the Germany economy.
‘The decline is mostly due to the strong rebound in April, which was quite surprising. We are still well above the first-quarter average and this suggests the underlying trend of the German industrial sector, and of the German economy, is intact,’ said a Frankfurt based economist.
The US Dollar meanwhile was continuing to be supported by yesterday’s better-than-forecast jobs figures. The US economy created 288,000 jobs in June, smashing forecasts for a figure of 212,000. The overall unemployment rate in the US also fell from 6.3% to 6.1%, a six-month low.
With the US markets closed for the Independence Day national holiday the EUR/USD exchange rate is likely to see little further movement in the rest of Friday’s session. Any movement will likely be the result of geopolitical events elsewhere.
Euro Exchange Rate News:
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