The euro once again began to gradually lose ground in pair with the US dollar after the release of the report, which showed a weakening of activity in the manufacturing sector of Germany. The minutes of the meeting of the European Central Bank, which were published today in the morning, also made a number of negative on the market.
According to the report of the Federal Bureau of Statistics, orders in the manufacturing sector of Germany in February 2019 fell by 4.2% compared with January, while economists had expected their growth by 0.5%.
The fall is directly related to the decline in demand from countries outside the eurozone. Compared to February of the previous year, orders in the manufacturing sector of Germany decreased by 8.4%.
The Bureau noted that the data indicate more than serious problems in the manufacturing sector in Germany, and the lack of external demand will continue to have a negative impact on production.
The recession in the eurozone economy will last much longer than expected. Such conclusions can be made in the study of the minutes of the meeting of the European Central Bank, which took place on March 6-7 of this year. They indicated that the ECB leaders had discussed more aggressive incentive measures, as some members of the ECB leadership expressed concerns about the impact on banks of sustainably low interest rates.
However, it ended with the fact that the ECB leaders at any time can adjust their policies if necessary, and, apparently, such a need may appear in the coming months if economic indicators continue to decline.
As for data on the American economy, they supported the US dollar. According to a report by the US Department of Labor, the number of initial claims for unemployment benefits for the week from March 24 to March 30 fell by 10,000 and amounted to 202,000. Economists expected the number of new applications to be at 218,000. Data for the week from March 17 to 23 were revised up to 212,000.
As for the technical picture of the EURUSD pair, a breakthrough and consolidation below the middle of the side channel in the area of 1.1220 will keep pressure on risky assets, which may lead to an update of the lower boundary in the area of 1.1185. In the scenario of returning to the resistance level of 1.1220, the bulls will try to build the lower limit of the new upward channel, using the minimum of this month in the area of 1.1184.
The British pound resumed its decline in pair with the US dollar. The data from the association of manufacturers and sellers of cars did not support the GBPUSD pair in the first half of the day, as they indicated a reduction in registrations. According to the report, the total number of registrations decreased by 3.4%, to 458,054, with the most registered registration of business class cars.
The material has been provided by InstaForex Company - www.instaforex.com