Dollar Edges Lower as Euro Shrugs Off German Orders Slump
Investing.com -- The dollar is a little weaker in early trading in Europe Thursday as the euro shrugs off a disappointing set of factory orders in Germany that bode ill for a quick turnaround in the euro zone’s largest economy.
New orders to German manufacturers fell by 4.2% in February, the biggest monthly drop in two years, with the steepest drop coming from foreign markets outside the euro zone. Orders were also down 8.4% on the year. The indications are that the situation didn’t improve much in March either, given that IHS Markit’s purchasing managers’ index for the country’s manufacturing sector fell further to a seven-year low in March.
News that President Donald Trump is to meet China’s top trade negotiator Liu He later on Thursday had little immediate effect on the currency market, which seems resigned to waiting for a final deal to be reached before drawing conclusions. The meeting was touted as a sign that talks are reaching their closing stage, but The Wall Street Journal reported that the U.S.’s insistence on keeping some tariffs in place on Chinese goods remains a major sticking point.
At 04:00 AM ET (0800 GMT), the dollar index, which tracks the greenback against a basket of six major currencies, was little changed from late Wednesday levels at 96.688. The euro was up a touch at $1.1235, while the pound was also higher at $1.3178.
The pound strengthened overnight after lawmakers moved by a majority of one vote to block a no-deal Brexit. Even so, that remains the default outcome unless the EU’s 27 member states unanimously agree to extend the new deadline of April 12, or unless parliament revokes its formal decision to leave the EU, an option that neither of the two big parties wants.
Later Thursday, the European Central Bank will release the minutes of its last policy meeting, possibly giving further clues as to the likelihood of further action to support the faltering economy. U.S. jobless claims, due at 06:30 AM ET (10.30 GMT), will also be closely watched for signs of weakness after a disappointing ADP payrolls report for March that was released Wednesday.
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