While today’s industrial production data for the Eurozone showed an unexpected decline, the Euro was able to edge higher against the US Dollar.
The EUR/USD pairing recouped losses as US MBA mortgage applications data showed a 2.1 per cent decline in the week ending March 7th following an increase of 9.4 per cent the previous week.
The MBA figures showed that applications volume has dipped in three out of the last four weeks.
Although a report revealed that industrial production in the Eurozone declined by 0.2 per cent in January rather than advancing by the 0.5 per cent expected, output was up 2.1 per cent on the year.
The annual gain was stronger than the 1.9 per cent increase expected.
The Euro was also modestly supported by the news that Irish government bonds rose ahead of the nation’s first bond action for almost four years, due to take place tomorrow.
Meanwhile, the safe-haven US Dollar strengthened against several of its higher-yielding currency counterparts as signs of slowing economic growth in China and Ukraine fears generated a risk-off environment.
Chinese trade data published on March 8th saw a shocking 18.1 per cent decline in exports, a worrying sign that the world’s second largest economy is struggling.
Bloomberg News Agency quoted macro strategist Mark McCormick as saying; ‘The clear theme is risk aversion. It’s a combination of themes. It’s certainly China, there’s clearly concerns about financial market stress in China.’
While a lack of particularly influential economic reports has left the EUR/USD pairing trading in a narrow range today, movement can be expected to occur tomorrow following the publication of the European Central Bank’s monthly report and advance US retail sales figures.
After the ECB refrained from introducing additional stimulus when it met last week, investors will be taking a keen interest in what the central bank has to say regarding inflation concerns and the Eurozone’s economic recovery.
Meanwhile, economists have predicted that US sales advanced by 0.2 per cent in February following a decline of 0.4 per cent in January.
A disappointing result could weigh on the ‘Greenback’ tomorrow.
On Friday German inflation data and the US University of Michigan confidence index will be the main causes of EUR/USD movement.
Euro (EUR) Exchange Rates
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Currency, ,Currency,Rate ,
Euro,,New Zealand Dollar,1.6427,