Forex News – Euro falls on weak German industrial orders

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The euro pared gains against the dollar after German industrial orders fall unexpectedly in August to minus 1.4 percent. The forecast was for an increase of 0.3 percent.

EURUSD fell to 1.3342 from 1.3371 before the data.

Earlier euro had hit a session high of 1.3397, the highest in four days after European Commission President Jose Manuel Barroso said policymakers are proposing coordinated action to recapitalise the region’s banks.

The European Union’s executive is proposing that member states carry out a coordinated recapitalisation of banks, the European Commission president said on Thursday.

“We are now proposing member states to have a coordinated action to recapitalise banks and so to get rid of toxic assets they may have,” Jose Manuel Barroso, president of the European Commission, said in a television interview relayed on YouTube.

The focus remains on the European Central Bank’s announcement of the interest rate at 1145 GMT and their subsequent press release around 1230 GMT.

Rates are expected to remain unchanged at 1.50 percent though some speculate there could be a rate cut of 25 basis points.

European Central Bank president, Jean-Claude Trichet, will be chairing his last interest-rate setting meeting today, before handing over the reins to current Governor of the Bank of Italy, Mario Draghi on November 1.

The ECB is more likely to announce plans for helping European banks with new credit in order to prevent a liquidity squeeze in the banking system.