The GBP to Euro Exchange Rate pushed above the 1.26 level on Friday as data released in Germany disappointed and as the UK currency was supported by a run of positive economic data releases.
Data released by the Berlin based Economy Ministry showed that German factory orders declined more than economists expected in May as tensions between Russia and the West dented demand for German goods. A weakening of the Eurozone as a whole also impacted on demand for German goods from other European Union countries.
The report showed that export orders fell by 1.2% from April and domestic orders tumbled by 2.5%. Basic goods orders fell by 3.4% and investment goods orders also dropped by 0.7%. Consumer goods orders also dropped sharply.
Despite the slide some economists are still confident that the German economy is performing well. April’s figures were strong so it was to be expected that May’s figures showed a drop off.
“In light of the good start into the second quarter, one can assume factory orders will increase on average in the second quarter. At the moment, however, one can observe a certain reservation, probably due to increased geopolitical risks. Overall, the upswing in manufacturing should continue at a moderate pace,” said the ministry in a statement.
Today’s data adds to the recent run of disappointing figures to emerge from the Eurozone’s largest economy and does little to calm nerves that the Eurozone recovery has stalled and its economy sliding back in the wrong direction.
The Euro was already under pressure from Thursday’s European Central Bank (ECB) policy meeting as Bank Governor Mario Draghi reiterated that interest rates will remain at record low levels for an extended period.
With the US markets closed for the July 4th holiday we can expect light trading. A lack of economic data is also set to mute the market with any movements likely to be as a result of geopolitical events.
Euro Exchange Rates
[table width=”100%” colwidth=”50|50|50|50|50″ colalign=”left|left|left|left|left”]
Currency, ,Currency,Rate ,
Euro,
,US Dollar,1.3592 ,
Euro,, Pound Sterling,0.7926 ,
Euro,,Australian Dollar,1.4542 ,
Euro,,Canadian Dollar,1.4474 ,
Pound Sterling,,Euro,1.2616 ,
US Dollar,,Euro,0.7357 ,
[/table]
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