Euro slips as German industrial production declines Somoybulletin


  • German Industrial Production declines for fourth straight month

The euro has started the week with losses. In the European session, EUR/USD is trading at 1.0527, down 0.57%.

Germany’s industrial production declines

German industrial production declined in August by 0.2%, following a revised -0.6% reading in July and shy of the consensus estimate of -0.1%. This marked a fourth straight decline, pointing to a prolonged slump in the production sector. There was some good news last week as factory orders rose 3.9% in August, but the outlook remains difficult. The manufacturing sector has been stuck in a downturn, with the September Manufacturing PMI coming in at 39.6, which indicates a sharp contraction (the 50 level separates contraction from expansion).

Germany has traditionally been the locomotive of the eurozone, but the largest economy in the bloc is a shadow of its former self. The economy was flat in the second quarter and the economy may have contracted in Q3. The German economy is getting squeezed by high interest rates, weak consumer consumption and falling exports.

US nonfarm payrolls sizzle

US nonfarm payrolls surprised to the upside, with a massive increase of 336,000 in September. This crushed the market consensus of 170,000 and the upwardly revised August reading of 227,000. The unemployment rate remained at 3.8%, compared to the market consensus of 3.7%. Wage growth decelerated in September – from 0.3% to 0.2% m/m and from 4.3% to 4.2% y/y. This is another sign that inflation is easing.

The blowout nonfarm payrolls led to the Fed futures market increasing the odds of a rate increase before the end of the year, which currently stands at 31%, according to the CME FedWatch tool. The Fed has been signalling that rates will remain “higher for longer” and traders appear to be listening to the Fed’s message.


EUR/USD Technical

  • EUR/USD is testing support at 1.0545. Below, there is support at 1.0489
  • 1.0641 and 1.0697 are the next resistance lines

Content is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Business Information & Services, Inc. or any of its affiliates, subsidiaries, officers or directors. If you would like to reproduce or redistribute any of the content found on MarketPulse, an award winning forex, commodities and global indices analysis and news site service produced by OANDA Business Information & Services, Inc., please access the RSS feed or contact us at Visit to find out more about the beat of the global markets. © 2023 OANDA Business Information & Services Inc.

Source link

Leave a Reply

Your email address will not be published. Required fields are marked *