Euro pares gains as German Factory Orders undershoot forecasts

• 1.1250 breached: EUR/USD retains modest daily gains, up nearly 0.8% this week
• A shortfall in German Factory Orders tempered support from stronger risk appetite and falling Oil prices.
• Wednesday’s US ADP employment and Services activity figures reinforced evidence of robust US economic momentum.

EUR/USD is trading just below 1.1250. The pair has retreated from session highs near 1.1270 after German Factory Orders fell short of forecasts. Even so, the Euro (EUR) advanced against the US Dollar (USD) for a second consecutive day on Thursday, supported by sharply lower Oil prices. It remains on course for its strongest weekly performance in three months.

German Factory Orders rebounded 4.4% in September after August’s 10.1% contraction, figures published earlier on Thursday showed. The recovery fell short of the 4.8% rise forecast by markets. Orders increased 3.3% year-on-year, compared with a 3.2% gain in August.

$20 Oil slump after US elections eases pressure on Eurozone economies

Brent Oil has fallen about $20 a barrel over the last two days to around $93.00 following the US midterm election outcome. The steep decline has supported the common currency and offered some relief to the Eurozone’s oil-importing economies. It comes amid hopes that diminished support will push US President Donald Trump to seek a way out of the conflict.

Although Trump defended the intervention in Iran on Wednesday, Vice President JD Vance said in a post on X that the war was the principal cause of the Republican defeat and that President Trump had recognised this. 

4% year-on-year consumer inflation in October added further support to the Euro. Wednesday’s preliminary Eurozone figures showed that price growth had accelerated to that pace, increasing pressure on the European Central Bank (ECB) to continue tightening monetary policy.

An 86K rise in net jobs in October exceeded the 69K increase expected, according to Wednesday’s ADP Employment figures. The US data reinforced signs of strong economic momentum but failed to support the US Dollar. Although the ISM Services Purchasing Managers Index (PMI) fell slightly short of forecasts, its level remained consistent with solid activity.