Euro advanced against the dollar paring all losses from the day despite weak economic data from the Europe this morning. The single currency seemed to ignore the news that June’s euro zone industrial orders fell more than expected reflecting slowing growth in the region.
Data from Eurostat reported that new orders fell by 0.7 percent on a month to month basis, against expectations for a 0.5 percent increase. On a yearly basis, orders increased by 11.1 percent in the year to June 2011, versus forecasts for a 12.1 percent rise.
Meanwhile, earlier in the day the Ifo German business climate index was released showing morale dropped to its lowest in 14 months in August. This was the biggest drop since late 2008 and signals Europe’s strongest economy is losing the momentum.
After the German data, EURUSD fell briefly to 1.4380 from 1.4396 within a minute of the news.
The pair is currently trading at 1.4469 at 09:30 GMT. There is market chatter that the euro has been lifted also due to a possible purchase of Italian bonds by the European Central Bank today. There is no confirmation as of yet but last week the ECB bought 14.3 billion euros of government debt to help stabilise Italian and Spanish debt yields.