Euro holds onto 1.1200 as falling US yields counter weak German data

Euro holds onto 1.1200 as falling US yields counter weak German data

07 Aug 2019 03:17 PM
 

Euro is trading around $1.1200. The euro is ignoring a fall of 1.5% in German industrial production, worse than expected. The US-Sino trade war is pushing U.S. yields lower, weighing on the dollar.

German industrial output has dropped by 1.5% in June and 5.2% year on year – significantly worse than expected. The euro zone's locomotive is showing another sign of derailment just one day after factory orders beat expectations. The fresh data has been weighing on the common currency.

The single currency was previously supported by another intensification in the US-Sino trade war. Beijing has fixed the yuan at a lower value – with USD/CNY just below 7.00 – keeping up the tensions in the trade wars. While China is wary of a rapid fall in the exchange rate – a move that could trigger massive capital outflows – it seems keen to retaliate against the upcoming US tariffs.

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