The euro slipped to a session low against the dollar on Monday after a weak reading of German industrial orders accelerated profit-taking prompted by data on Friday showing a lower US jobless rate. German industrial orders fell 3.4 percent on the month in December, more than forecasts for a 1.5 percent fall, due to weak demand outside the eurozone.
The data highlighted the German economy's reliance on external demand. Investors also sold the euro as they pared back expectations of a European Central Bank rate rise, while analysts said the currency's near-term direction would hinge on discussions about strengthening the eurozone economy and its debt rescue fund. By 1213 GMT, the euro had fallen 0.4 percent on the day to $1.3534, extending losses made after US non-farm payrolls data on Friday. The German data triggered stop-loss orders on the downside, overtaking earlier demand from Asian names, after most Asian markets resumed trading after the lunar new year holidays.
Further losses in the euro were limited for the moment by support around $1.3530, its 100-day moving average. The dollar was supported after investors brushed off a smaller-than-expected rise in January US payrolls late last week and instead focused on drop in the jobless rate to 9.0 percent from 9.8 percent in November.
The data is unlikely to prevent the Federal Reserve from completing its $600 billion government bond-buying programme to support the economy, but signs of underlying strength in the labour market boosted US bond yields. Currency speculators had raised their bets on the single currency for the week to February 1 to the most since late October, but Trichet played down inflation risks last Thursday, helping knock the euro back from a near three-month high to the dollar.
Reports of infighting over a French and German push for a comprehensive package of reforms to address the eurozone debt crisis also kept the euro on the back foot. The apparent rift was a stark reminder of the difficulty of getting an agreement in the 17-nation currency bloc, though traders anticipate eurozone policymakers will hammer out more steps to counter the debt crisis by March. The dollar index, which tracks the greenback against a basket of major currencies, inched up on the day to 78.198, off a three-month low of 76.881 hit last week. The dollar was up slightly at 82.35 yen, after having risen more than 1 yen from a one-month low of 81.10 yen hit seconds after the US payroll data on Friday. Resistance was at 82.56, the top of the closely watched Ichimoku cloud.
Comments
Comments are closed.