USD Weakens Despite Weak European Data
German data disappoints again. Eurozones Industrial Orders decline. Market turns to Durable Goods Orders.
Euro is higher after Finnish Prime Minister Katainen who threatened earlier to withdraw support for Greek bailout specified that Finland will continue to talk with Greece and other countries to find a solution to the collateral payments issue that was rejected by Germanys chancellor Merkel. In this issue, Greece has agreed to provide extra collateral to Finland. Finnish prime minister said that a series of solutions are being discussed.
Data from Germany continue to disappoint as the IFO Business Climate index for August declined to 108.7 from 112.9. The Expectations component dropped to 100.1 from 105 nearly breaching the key 100 level that distinguishes between positive and negative outlooks. Eurozones debt problem and a significant slowdown of German and Eurozones economies are blamed for a poor number.
Industrial New Orders in Eurozone declined in June by -0.7% after a considerable rise of 3.6% in May highlighting growth concerns and worries about the industrial sector. Year over year print slowed to 11.1% from 13.8%. Germany, which is the largest economy in the Eurozone, has recently seen a string of weak data that points to a disappointing future Eurozone releases.
The New York session will bring July Durable Goods orders at 8:30 am ET. Orders are expected to increase by 2.1% after they dropped by -1.9% in June. Core measure is projected to show a decline of -0.3% from previous 0.4%. This indicator shows high degree of volatility so large swings are common.
CAD traders should pay attention to Crude oil inventories due at 10:30 am ET that are expected to show 0.7M barrels from previous 4.2M barrels. Low print would underpin crude oil which could subsequently support the Canadian dollar.
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