- German industrial output +1.2% mom July vs +9.7% in June
- Euro zone investor confidence data awaited
- US Dollar (USD) boosted by the unemployment rate falling by more than expected to 8.4%
- US closed in observance of Labour Day public holiday
The Euro US Dollar (EUR/USD) exchange rate is trading mildly lower on Monday, adding to last week’s losses. The pair lost -0.5% across the previous week, edging lower every day. At 07:15 UTC, EUR/USD trades -0.08% at US$1.1830.
Concerns over the health of the economic recovery in the Eurozone and particularly Germany have started to increase across recent weeks. The latest German industrial production figures fuelled those anxieties further.
German Industrial Production increased just 1.2% month on month in July. This was down significantly from June’s 9.7% surge in output, as well as being short of the 4.7% jump that analysts had forecast. The data comes after German Factory orders pointed to the economic recovery in the so-called powerhouse of Europe losing momentum.
The sell off in the Euro has been gathering pace following comments by the European Central Bank last week hinting at concerns over the strength of the common currency. The ECB are due to announce its rate decision later in the week. However, no changes to policy or interest rates are expected.
Attention will now turn to Eurozone Sentix Investor Confidence data which will provide further insight into the health of the outlook for the Eurozone economy.
The US Dollar rallied hard on Friday after the closely watched Labour Department’s jobs report showed that the unemployment rate fell by more than expected in August to 8.4%, down from 10.2% in July. The upbeat number calmed concerns that the resurgence of covid cases over the summer months was harming the recovery in the labour market.
Yet whilst data was supportive of the US Dollar the fact that Congress is still dragging its feet over an additional stimulus package is keeping any gains in check.
Today the US is closed in observance of the Labour Day public holiday, so trading is expected to be light.