Forex snapshot

The euro has dropped below the $1.36 mark after soft German retail factory orders added to yesterday’s decline, while the pound is now back at pre-US jobs report level after a volatile 24 hours.

A ten euro note
Source: Bloomberg

Euro slips below $1.36

EUR/USD is trading at $1.3590, down 0.14% on the day as Germany factory orders revealed a larger-than-expected drop in May. The euro had already been in a downward trend before the US jobs report smashed expectations, and this announcement pushed the currency pair below the $1.36 mark.

Ordinarily, the European Central Bank interest rate decision and press conference would have gathered more interest. However, because there was no change to monetary policy and additional significant news, Mario Draghi’s statement gave traders little to work with.

The ECB is likely to keep rates unchanged for the next quarter, and I suspect the eurozone will continue to produce underwhelming economic indicators that could lead to additional easing, as Brenda Kelly previously outlined.

Pound steady after US jobs release

The pound is trading at $1.7142, after the significantly strong jobs report from the US drove the currency pair towards the $1.71 mark however, today it has recovered its losses. It is quite a testament to the pound that it managed to hang onto the $1.71 handle in the face of such a strong employment reading from the US.

Next week, the UK will announce the latest manufacturing and industrial production report, and British economic indicators have been strong recently. The 100-hour moving average of £1.7107 is providing support, and if the data is strong it could target $1.72.

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