Euro Decline Unaffected by Growth in German Factory Orders
THE TAKEAWAY: German factory orders up 0.6% for May, beats expectations -> Spanish bond sale weighs on Euro -> ECB expected to cut interest rate
German factory orders surprised analysts by rebounding 0.6% higher during the month of May (seasonally adjusted), beating expectations for an unchanged amount of orders. In April, factory orders sunk by a revised 1.4%, and there were 5.4% less factory orders in May 2012 than May of last year, according to the Economy Ministry.
Local factory orders were down 1.3%, while orders from other countries in the Euro-zone were up 7.7% in May. Orders for consumer goods were up 3.5%, driven by a 10.9% increase in demand from around the Euro-zone. The rise in exports is more impressive when taken in the context of the surrounding Euro debt crisis.
The rise in factory orders didn’t reverse the Euro’s downtrend that started earlier this morning. EURUSD began falling in anticipation of today’s expected interest rate cut by the ECB, and the decline continued to 1.2500 on news of Spanish bonds being sold for higher yields in today’s debt sale.
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