Euro yawns as German factory orders jump

The euro is showing little movement, as it trades just above the 1.13 line.

German Factory Orders recovered in November, with a robust gain of 3.7% m/m. This follows a sharp decline of -5.8% m/m in October. Although factory orders are up, the manufacturing sector continues to grapple with supply bottlenecks which are hampering growth. Earlier this week, German Manufacturing PMI for December came in at 57.4, unchanged from November and at its lowest level since January 2021. The PMI indicates expansion but is significantly lower than the mid-60s readings we saw in Q2 and Q3.

The FOMC minutes indicated that committee members viewed inflation risks to the upside, and agreed that tapering should be accelerated due to inflationary pressures and the strong recovery. Members did not provide a lift-off date for a rate hike, but the minutes stated that they were open to raising rates “sooner or at a faster pace” than previously anticipated. The markets have priced in a March hike at around 60%, with three rate hikes expected in 2022.

In the US, the markets are awaiting Friday’s nonfarm payroll report. The ADP employment report surprised to the upside, with a December reading of 807 thousand new jobs, double the consensus of 400 thousand. The huge gain caused Goldman Sachs to upwardly revise its forecast by 50 thousand to 500 thousand and some analysts are projecting a print north of the 1-million mark. Still, it should be remembered that the ADP report is not all that reliable an indicator for nonfarm payrolls. The consensus for the NFP stands at 424 thousand, and if the read comes in below expectations, we could see the US dollar falter, as a weak NFP could delay lift-off for a Fed rate hike.


 EUR/USD Technical

  • EUR/USD has support at 1.1303. Below, there is support at 1.1232
  • There is resistance at 1.1415 and 1.1456

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Kenny Fisher

Kenny Fisher

Market Analyst at OANDA
A highly experienced financial market analyst with a focus on fundamental and macroeconomic analysis, Kenny Fisher’s daily commentary covers a broad range of markets including forex, equities and commodities. His work has been published in major online financial publications including, Seeking Alpha and FXStreet. Kenny has been a MarketPulse contributor since 2012.