Stock Market Watch

Forex Market Update: Euro Climbs against Dollar, Aussie Dollar Falls to Two-Month Low

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The euro climbed sharply against the U.S. dollar during European trading hours on Tuesday following the release of unexpectedly strong German industrial orders data; however, gains could be capped as speculation still persists that the European Central Bank could further ease its monetary policy to boost euro zone’s faltering economy.

The euro traded as high as $1.3123, climbing from $1.3077, following the data release. Industrial orders in Germany increased 2.2% in February while economists were expecting it to fall by 0.5%.

The euro came under pressure on Monday after the ECB Chairman Mario Draghi said that the central bank would keep a close eye on economic indicators and might look to further cut benchmark interest rate to shore up the economy. On Monday, two separate data pointed towards economic slowdown. Although euro zone’s PMI data for April showed better-than-expected reading, the pace of expansion eased and retail sales in March also fell 0.1% while economists anticipated no change in reading.

“We don’t think the euro’s gains will last… The German data saw the euro spike, but in the grand scheme of things the euro zone economy has been lagging, especially the U.S. Anything above $1.32 is a sell,” said Alvin Tan, currency strategist at Societe Generale, according to Reuters.

Meanwhile the Australian dollar traded broadly lower on Tuesday after Australia’s central bank slashed rates to record low level.  At last check, (around 8:45 a.m. EST) the Australian dollar was down 0.87% to trade at $1.0164.

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edliston
Post Written By: Ed Liston
Ed Liston is a senior contributing editor at TheStockMarketWatch.com. An active market watcher and investor, Ed guides an independent team of experienced analysts and writes for multiple stock trader publications. He is widely quoted in various financial publications on the Internet. When Ed is not writing about stocks, investing in stocks, talking about stocks, or otherwise doing something stock related, he likes to go sailing and fishing in his yacht.

Ed Liston

Ed Liston is a senior contributing editor at TheStockMarketWatch.com. An active market watcher and investor, Ed guides an independent team of experienced analysts and writes for multiple stock trader publications. He is widely quoted in various financial publications on the Internet. When Ed is not writing about stocks, investing in stocks, talking about stocks, or otherwise doing something stock related, he likes to go sailing and fishing.

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