EUR/USD Under Pressure as Mixed Data, French Election Worries Weigh
- Strong German factory orders and weak Euro-Zone retail sales paint a mixed picture.
- French Presidential candidate Francois Fillon under pressure to quit over ‘fake jobs’ scandal.
EURUSD traded below 1.07500 in early European trade after mixed economic messages came out of Europe. German factory orders (December) beat on the upside, coming in at a robust 5.2% m/m vs. 0.7% expected and a downwardly revised -3.6% in November. On an annual basis orders grew by 8.1% vs. 4.2% (exp) and a downwardly revised prior month of 2%.
The Markit Euro-Zone retail PMI (January) however edged lower to 50.1 from a prior month’s 50.4, still just in expansion territory, but pointing to consumer belt-tightening in the 28-country zone. German sales fell to 50.3 from 52, while France provided the only real positive with retail sales jumping to 53.4 from December’s 50.1.
And the latest Euro-Zone Sentix Investor Confidence did little to buoy the euro, despite beating market expectations. The February figure came in at 17.4 vs. 16.8 but was still lower than January’s reading of 18.2.
Chart: EURUSD 5-Minute Timeframe (February 6, 2017)
The single currency was also under pressure from the ongoing political upheaval in France, ahead of the French presidential elections in late-April. Centre-right candidate, and former Prime minister, Francois Fillon, is under a cloud after allegations that he paid his wife and two of his children around EUR900,000 of public money for work that they did not do. Fillon, widely tipped to win the race, is said to be making a speech at 16:00GMT, where he is expected to pull out of the race.
Centrist candidate Emanuel Macron is currently expected to win the Presidential race, ahead of far-right candidate Marine Le Pen who has vowed to take France out of the European Union and put ‘France First’ in areas such as housing and employment.
--- Written by Nick Cawley, Analyst
To contact Nick, email him at Nicholas.email@example.com
Don't trade FX but want to learn more? Read the DailyFX Trading Guides
DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.