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Forex - EUR/JPY gains on surging German output data

Published 05/08/2013, 02:50 PM
Updated 05/08/2013, 02:51 PM
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Investing.com - The euro rose against the yen on Wednesday after German industrial output figures beat expectations, one day after factory orders in Europe's largest economy came in better than expected as well.

In U.S. trading on Wednesday, EUR/JPY was up 0.46% at 130.07, up from a low of 129.01 and off a high of 130.42.

The pair sought to test support at 129.01, the earlier low, and resistance at 130.42,  the earlier high.

Germany's industrial output, which includes manufacturing, mining, electricity and gas concerns, shot up 1.2% in March, the largest increase in a year and defying expectations for a 0.1% decline.

February’s figure was revised up 0.6% from 0.5%.

Official data released on Tuesday revealed that German factory orders climbed 2.2% in March, defying expectations for a 0.5% decline.

The numbers bolstered hopes that the German economy, Europe's largest, may post better-than-expected growth rates for the first quarter.

During the October-December period of 2012, Germany's economy contracted by 0.5%.

The string of good news out of Germany put to rest recent concerns that the European Central Bank may trim benchmark borrowing costs.

The European Central Bank recently cut interest rates by 25 basis points to 0.50%, though further action could be necessary if the economy doesn't gain steam, ECB President Mario Draghi said in Rome on Monday.

The euro, meanwhile, was up against the pound and up against the U.S. dollar, with EUR/GBP trading up 0.23% at 0.8466 and EUR/USD trading up 0.62% at 1.3160.

On Thursday, markets in France, Germany and Switzerland will be closed for national holidays, though the ECB will publish its monthly bulletin, while Spain is to hold an auction of 10-year government bonds.

Japan is to release its leading index.










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