Weak German factory data is dragging on the Euro on Wednesday. The Euro is extending losses versus the US Dollar for a third consecutive session. The Euro US Dollar exchange rate settled on Tuesday -0.6% lower at US$1.0840 following a surprise ruling by the German constitutional court on the European Central Bank’s quantitative easing programme.
At 08:15 UTC, EUR/USD is trading down -0.1% at US$1.0825 following weak German factory data and as investors look ahead to a barge of data from the Eurozone and private payroll figures from the US.
German Factory Orders Tank -15.6%
The Euro is trending lower after data showed that German factories saw demand collapse in March. German factory orders fell 15.6% month on month, the largest decline since the report started almost 30 years ago, as lockdown measures brought the German economy to a halt.
The eurozone economic calendar is full today. Investors will now look ahead to the service sector PMI’s for the bloc. Analysts are expecting activity to have slumped to just 11.7 in April. Spain and Italy, two countries badly affected by the coronavirus crisis and also heavily reliant on tourism are expected to see the service sector PMI tumble to an almost unbelievable 10 and 9 respectively.
Finally, Eurozone retail sales are also expected to see a -8% month on month decline in March as demand evaporated. Euro investors will need a strong stomach today to handle a barrage of disastrous data.
ADP Payrolls Down 20 Million ?
The US Dollar is advancing versus its major peers across the board as US – China tensions remain over the origins of covid-19 and as investors look ahead to the release of US ADP private payroll data. The ADP payroll report is closely watched because it is considered a leading indicator for Friday’s non-farm payroll report.
Analysts are expecting the ADP private payroll report to show a 20 million decline in April, the biggest decline on record. This equates to around a decade’s worth of jobs being wiped out in 1 month. Initial jobless claims data over the past 6 weeks has given the markets plenty of warning over the damage that the coronavirus crisis is inflicting on the US labour market. However, a weaker than forecast reading could still move the US Dollar.
