The euro rallied throughout much of the US trading session thanks to a rise in risk appetite, and despite the fact European economic data was broadly disappointing. Euro-zone industrial new orders fell for the fifth straight month in December at a rate of 5.2 percent, making the worst string of declines since record keeping began in 1994. The annual rate showed a sharp contraction of 22.3 percent, and while this is up from the record low of -27.4 percent in November, the outlook for European producers looks gloomy as both domestic and foreign demand wane. Meanwhile, the IFO index of German business confidence moved in line with expectations, as there was broadly weak sentiment on the business climate with the index down at a new record low of 82.6, while the index gauging current economic conditions fell to nearly match the 6-year low at 84.3. On the other hand, the outlook for growth improved, with the index up to 80.9 from the December record low of 76.9, amidst prospects for recovery in the long run thanks to intervention efforts by European governments and the European Central Bank’s past rate cuts.
Related Article: Euro Weekly Trading Forecast
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