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Forex - EUR/USD drops on German industrial production data

ForexJan 09, 2013 12:32PM ET
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Investing.com - The euro weakened against the dollar on Wednesday after German industrial production figures fell short of expectations, a day after factory orders in Europe's largest economy also disappointed.

In U.S. trading on Wednesday, EUR/USD was trading down 0.06% at 1.3074, up from a session low of 1.3037, and off from a high of 1.3095.

The pair was likely to find support at 1.3017, Monday's low, and resistance at 1.3140, Tuesday's high.

German industrial production rose 0.2% in November, according to official data, missing market expectations for a 1.0% increase.

German industrial production fell 2.9% on year in November, in line with expectations.

On Tuesday, the German government reported that factory orders fell 1.8% in November, outpacing market expectations for a 1.4% decline thanks in part to slumping overseas demand for the country's goods and services.

The figures sent the euro falling against the greenback though the single currency managed to trim earlier losses.

Elsewhere, final data showed that the eurozone economy contracted 0.1% in the third quarter, in line with preliminary estimates as well as market expectations.

The greenback saw added safe-haven demand as markets began to brace for fourth-quarter earnings and congressional debates over terms to raise the U.S. government's debt ceiling.

Markets also avoided the euro ahead of the European Central Bank's monetary policy meeting this week.

Expectations that the ECB may move to cut interest rates kept investors favoring the greenback and other safe-harbor venues.

The euro, meanwhile, was up against the pound and up against the yen, with EUR/GBP trading up 0.09% at 0.8155, and EUR/JPY trading up 1.00% at 115.01.

On Thursday, markets will eagerly await the ECB's announcement on benchmark interest rates.

A post-policy meeting press conference will take place as well.

The U.S. is to publish the weekly government report on initial jobless claims.

Forex - EUR/USD drops on German industrial production data

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