The euro weakened considerably after the release of German industrial data

07.10.2015

On Wednesday, the euro fell to session lows against the dollar and yen after data showed that industrial production in Germany has narrowed in August with the fastest pace in a year.

EUR/USD fell 0.34% to 1.1235 from 1.1271 late on Tuesday.

The German Ministry of Economy said that the volume of industrial production in Germany fell 1.2% per month, while there was expected an increase of 0.2%. The decline was the highest since August 2014, adding to fears that slowing global economic growth was reflected in the largest economy of the Eurozone.

Nevertheless, July figure was revised to an increase of 1.2% instead of 0.7%.

The report was published the next day after another report showed that the volume of industrial orders in Germany unexpectedly fell in August by 1.8%.

The euro weakened against the yen, EUR/JPY getting down 0.48% to 134.87.

The Japanese currency strengthened after the Bank of Japan kept monetary policy unchanged at its meeting despite recent reports pointing to weakness in the Japanese economy. The Bank of Japan refrained from expanding its stimulus program, but some investors believe that the central bank may ease monetary policy at its meeting in October.

Last month, data showed that core inflation in Japan fell for the first time from the moment when in 2013 the Bank of Japan launched a program of quantitative easing in the amount of $ 1.4 trillion in an attempt to support economic growth and to overcome the long-term deflation.

The yen also strengthened against the dollar, with USD/JPY pair losing 0.16% to 120.02.

The euro fell against the British pound, EUR/GBP retreating by 0.77% to 0.7346.

On Wednesday, the pound rose to a three-week high against the US dollar thanks to a confident British production statistics, while the demand for the US currency remained generally under pressure. During European morning trade, GBP/USD reached 1.5308, the peak since September 23, and subsequently consolidated at 1.5301, gaining 0.48%.

The USD index, which tracks the US currency against a basket of six major rivals, went up 0.15% to 95.67.

 

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