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Forex - EUR/USD gains on firming German industrial output data

Published 05/08/2013, 12:51 PM
Updated 05/08/2013, 12:52 PM
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Investing.com - Stronger-than-expected output figures from Germany's factories, mines and utilities sent the euro gaining against the dollar on Wednesday, a day after German factory orders beat expectations as well.

In U.S. trading on Wednesday, EUR/USD was up 0.75% at 1.3177, up from a session low of 1.3073 and off from a high of 1.3194.

The pair was likely to find support at 1.3054, Monday's low, and resistance at 1.3242, the high from May 1.

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%.

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%.

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

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 yen, with EUR/GBP trading up 0.27% at 0.8468, and EUR/JPY trading up 0.60% at 130.26.

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.

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










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