Euro Up On Surge in Germany Factory Orders in September

Euro Up On Surge in Germany Factory Orders in September
November 7, 2019

 

The euro rose against the Kiwi dollar yesterday after the release of upbeat German factory orders data for September. The euro dollar’s uptrend was also aided by the release of IHS Markit’s strong eurozone services PMI data for October. The New Zealand dollar, on the contrary, was weakened by a slight increase in the unemployment rate in the September quarter. The EUR/NZD pair rose from a low of 1.7325 to a high of 1.7411 in the past 24 hours.

Destatis, the Federal Statistical Office of Germany, has stated that the price adjusted new factory orders grew 1.3% m-o-m in September 2019, versus analysts’ expectation for modest growth of 0.1%. In the previous month, German factory orders shrank by 0.4%.

The German factory orders data was followed by a series of services PMI data from the Eurozone. According to the document published by IHS Markit, Italian service sector PMI (Purchasing Managers Index) increased to 52.2 in October, from 51.4 in September, reflecting the fastest growth since March 2019. Economists had anticipated the Italian service sector PMI to decline slightly to 51.0.

Likewise, the German final services PMI rose modestly to 51.6 in October, from 51.2 in the earlier month. Economists had anticipated the final services PMI data to remain unchanged in the reported period. Despite the modest rise, the German final services PMI reading remains the weakest since mid-2013.

Overall, the Eurozone final services PMI increased to 52.2 in October, from 51.8 in September. Economists did not anticipate any change in the final services PMI. The index recorded the second-lowest reading since January.

Following the IHS Markit PMI data, Eurostat reported an increase in retail sales for the second successive month in September. As per Eurostat estimates, in September, the volume of retail trade (seasonally adjusted) grew by 0.1% on m-o-m basis in the euro area, compared with 0.6% in the earlier month. The reported figures were in line with analysts’ estimates.

While food, tobacco, and drink sales declined 0.4%, non-food product sales inched up 0.1%. On annual basis, retail sales growth increased to 3.1% in September, from 2.7% in the earlier month. Economists had anticipated the sales to increase 2.4%.

Earlier yesterday, Statistics New Zealand reported an increase in the unemployment rate to 4.2% in the September quarter, from 3.9% in the earlier quarter. Economists had anticipated the unemployment rate to reach 3.9% in the reported period. The surge in Germany factory orders and upbeat Eurozone services PMI is expected to keep the euro stronger against the Kiwi dollar in the days ahead.

Technically, the EUR/NZD pair is moving along the ascending trend line as shown in the image below. The RSI indicator is having a reading above 50. Furthermore, the currency pair is also trading above its 50-day moving average. Therefore, we can expect the euro to gain further ground against the New Zealand dollar in the days ahead.

EUR - technical analysis - 7th Nov 2019

Disclaimer: Any financial trading analysis offered here is our opinion and is not intended as advice or direction for investors. We cannot guarantee the success of any trades made as a consequence of this article, and we encourage traders to incorporate a strong money management strategy to limit losses when they enter the markets. Please use this article as part of your own research before formulating strategies prior to trading.

Ian Maguire

Ian Maguire

Ian is our resident contributor to the latest going ons in the cryptomarket, keeping up to date with the latest icos and coins


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