Euro drifts lower as investors’ cautiousness offsets upbeat German factory data
The Euro (EUR) shows a moderately negative stance against the US Dollar (USD) on Monday, in a calm start of the week. German Factory Orders figures released earlier on the day beat expectations, but ongoing concerns about the fate of the US-Iran peace process are weighing on risk sentiment and underpinning support for the Greenback.
The EUR/USD pair is trading at the 1.1415 area at the time of writing, after a failure at the 1.1470 area late last week, while the US Dollar Index (DXY), which measures the value of the USD against a basket of six peers, appreciates beyond the 101.00 level, after bouncing from the 100.60 area on Friday.
German factory data, investors' sentiment improve
In the Eurozone, data from Germany beat expectations, with Factory Orders rising 1.9% MoM in May, well above the 1.2% increase expected, partially reversing the 3.2% contraction seen in April. Later on the day, the Sentix Investor Confidence index for July improved to -3.1, its best reading since the beginning of Iran's war and a significant recovery from the -13.4 print seen in June.
Investors’ enthusiasm about these figures, however, has been dampened by fresh concerns about the US-Iran peace deal. On the one hand, Iranian authorities have reiterated their willingness to collect fees from vessels crossing the Strait of Hormuz, a possibility flatly rejected by the US, while on the other, Iran and Israel have escalated their rhetoric, casting shadows about the fate of a fragile ceasefire.
Later on the day, Eurozone’s Producer Price Index (PPI) and Retail Sales data will provide further clues about the region’s economic momentum. In the US, the focus will be on the ISM Services Purchasing Managers’ Index (PMI), which is expected to confirm the picture of a resilient US economy and is likely to frame the speech of Fed Governor Christopher Waller, due later on the day.
Disclaimer: The content of this article solely reflects the author's opinion and does not represent the platform in any capacity. This article is not intended to serve as a reference for making investment decisions.
You may also like
Wall Street giants collectively raise rate hike forecasts, US Treasury futures continue to fall, gold drops over 1% to break 4000
After the US October CPI exceeded expectations, Goldman Sachs and Nomura added a forecast for an interest rate hike in March next year, while Deutsche Bank included a forecast for a rate hike in January next year. Currently, the market has fully priced in a 25 basis point rate hike in December, with a 13% probability for a 50 basis point hike. On Wednesday, the US Treasury spot market was closed, but Treasury futures continued to fall, with corresponding yields rising by about 2 to 4 basis points, and spot gold came under pressure, dropping by 1.1%.
No Need to Worry About the Cooling Down of AI Data Center Construction? The US Import Boom Is Unlikely to Subside in the Short Term, Real Impact May Come in 2029
It takes an average of 4.8 years from finalizing investment to starting construction of a data center project, and an additional 2.6 years from construction start to becoming operational. Servers usually cannot be installed until after the building structure and racks are completed. For trade partners such as Taiwan (China), South Korea, and Mexico who rely on US data center supply chain demand, the inertia in construction timelines provides at least a one- to two-year buffer for future exports.
Federal Reserve Major Debate: When Should the Tenure of “Number Three” Williams End?
The main point of contention is whether Williams should step down in June 2028, upon completing a full 10-year term, or in June 2027, when he reaches the mandatory retirement age of 65. Analysts point out that the Federal Reserve Board holds ultimate discretion; if he leaves early, Fed Chair Waller would be able to assert greater control over the appointment to this critical position. However, forcing Williams to shorten his term could easily be interpreted as political manipulation. Williams himself is expected to serve until June 2028.
Crypto prices
More
