Euro-Zone Fears To Increase

Daily Forex Fundamentals | Written by Investica | Jul 24 08 10:32 GMT |

The weak Euro-zone data will reinforce fears and continue to limit the scope for Euro gains in the near term The Euro was unable to push back above 1.58 on Wednesday and weakened to test support below 1.57. Oil dipped to a 7-week low which provided support to the dollar while a sharp drop in gold prices was also an important positive influence. Markets have moved back towards pricing in Federal Reserve interest rate increases during the Autumn and will be looking to assess whether the data provides any justification for a tighter stance. A weak set of data would trigger renewed doubts over the possibility of an interest rate hike this year which would tend to undermine the dollar. The Euro-zone industrial orders data was weaker than expected on Wednesday with a sharp monthly decline which will maintain unease over economic trends. The dollar held slightly stronger than 1.57 in early Europe on Thursday. The German IFO survey weakened to 97.5 in July from 101.3 which was the lowest reading for nearly three years and will reinforce fears over a sharp Euro-zone deterioration. The Euro-zone PMI data was also weak with the flash July indices well below the 50.0 level. The French data was notably weak and the Euro dipped to 1.5640 following the data before a recovery back to 1.5680 Investica http://www.investica.co.uk Disclaimer: Investica's market analysis is not investment advice and must not be taken as recommending particular market positions. Investica can take no responsibility for any actions taken by investors.