By David Schutz, THE TAKEAWAY – German factory orders lower than expected -> weak numbers underscore risk averse trend -> Euro drops as ECB decision coming up German factory order data for August, released today, showed a drop of -1.4% versus the forecasted flat number. The drop was slightly offset by a revision to July’s figure, raised to -2.6% from -2.8%, but remains bad news for German industry. The annual front also showed sub-prediction figures, coming in at 3.9% versus the expected 4.7%. Here also the loss was slightly alleviated by a revision of the previous number from 8.7 to 8.9. The weak numbers underscore the weakness of the beleaguered Eurozone economy given the possibility of a credit breakdown should Greece default on loans. Concerns that the current crisis may escalate into a recession have given investors cold feet, shaking confidence in a market that is already experiencing turmoil not seen since the 2008 crash. German PMI manufacturing numbers released earlier this week hit a two-year low, and analysts have blamed low German manufacturing numbers on reductions in exports and domestic demand. Domestic orders were particularly weak at -3.2% in Aug, while foreign orders only rose 0.1%. Other European nations have born similarly weak industrial fruit. The immediate market reaction showed a hefty drop at the report’s release, and further drops may come later today with the ECB’s decision on interest rates coming up. For full technical outlook
DailyFX is the forex news and research arm of FXCM, Inc (NYSE: FXCM), which provides currency trading and brokerage services and is an advertiser on TheStreet websites. Any opinions, news, research, analyses, prices, or other information is provided as general market commentary, and does not constitute investment advice. Dailyfx will not accept liability for any loss or damage, including without limitation to, any loss of profit, which may arise directly or indirectly from use of or reliance on such information. Currency trading involves significant risk of loss. Individual authors may hold positions in the currencies discussed in the article.