Euro trims gains as German Factory Orders miss expectations

• EUR/USD dips below 1.1250, but holds mild daily gains and remains near 0.8% up for the week so far
• German Factory Orders missed expectations, partially offsetting the impulse from risk-on markets and lower Oil prices.
• US ADP employment and Services activity data confirmed the strong momentum of the US economy on Wednesday

The Euro (EUR) appreciated for the second consecutive day against the US Dollar (USD) on Thursday, buoyed by the sharp decline in Oil prices, although it has pulled back from session highs following the release of lower-than-expected German Factory Orders figures. The EUR/USD pair trades just below 1.1250 after pulling back from session highs near 1.1270, but it remains on track to its best weekly performance in three months.

Data released earlier on Thursday showed that German Factory Orders bounced up 4.4% in September, following a 10.1% decline in August but missing market expectations of a 4.8% increase. Year-on-year, orders rose 3.3%, up from August’s 3.2% gain.

US elections send Oil tumbling and give a respite to Eurozone economies

The common currency has been boosted by the sharp decline in Oil prices following the outcome of the US midterm elections. The price of the Brent Oil barrel has plummeted about $20 in the last two days, to levels near $93.00, providing some relief to the Eurozone’s oil-importing economies, amid hopes that the loss of support will force US President Donald Trump to look for an exit from the conflict.

Trump justified the intervention in Iran on Wednesday, but Vice President JD Vance affirmed in a post on X that the war was the main reason for the republican defeat and that President Trump had acknowledged it. 

Beyond that, Eurozone preliminary data released on Wednesday revealed that consumer inflation accelerated to a 4% year-on-year pace in October, adding pressure on the European Central Bank (ECB) to keep tightening its monetary policy and providing additional support to the Euro.

In the US, Wednesday’s data added to evidence of the strong economic momentum, but it was unable to lift the US Dollar. ADP Employment figures showed an 86K increase in net jobs in October, beating expectations of a 69K increase. The ISM Services Purchasing Managers Index (PMI) came slightly below expectations but still at levels consistent with solid activity