German Factory Orders fall short of forecasts as Euro pares gains

• EUR/USD slips under 1.1250 while retaining modest daily gains and a rise of nearly 0.8% so far this week
• Weaker-than-forecast German Factory Orders partly tempered the support from falling oil prices and improved risk appetite.
• Wednesday’s US ADP employment and services activity figures reinforced evidence of robust momentum in the US economy.

Disappointing German Factory Orders figures prompted the Euro (EUR) to retreat from its session highs on Thursday. Nevertheless, sharply lower oil prices helped the currency advance against the US Dollar (USD) for a second successive day. Having eased from an intraday peak near 1.1270, EUR/USD is trading just below 1.1250 and remains on course for its strongest weekly performance in three months.

German Factory Orders rebounded by 4.4% in September after falling 10.1% in August, according to figures published earlier on Thursday. The recovery fell short of the 4.8% rise forecast by markets. Annual growth reached 3.3%, compared with August’s 3.2% increase.

Oil slumps after US elections, easing pressure on Eurozone economies

A steep fall in oil prices in the wake of the US midterm election result has lent support to the single currency. Over the past two days, Brent Oil has dropped by about $20 a barrel to around $93.00, offering some respite to the Eurozone’s oil-importing economies. The decline comes amid hopes that diminished support will compel US President Donald Trump to seek a way out of the conflict.

While Trump defended the intervention in Iran on Wednesday, Vice President JD Vance stated in a post on X that the war was the principal reason for the Republican defeat and that President Trump had recognised this. 

Further support for the Euro came from preliminary Eurozone figures published on Wednesday, which showed annual consumer inflation quickening to 4% in October. The reading increased pressure on the European Central Bank (ECB) to continue tightening monetary policy.

Although Wednesday’s US releases provided further evidence of robust economic momentum, the US Dollar failed to gain ground. Net job creation of 86K in October was reported by ADP, exceeding the expected 69K increase. Meanwhile, the ISM Services Purchasing Managers Index (PMI) fell slightly short of forecasts, though its level continued to indicate solid activity.