Tremour in the euro forex market today as the German Factory Order falls below par in Germany. The fallen German factory orders sent shock waves through the forex market as traders ponder on Euro zone economy. Is this a sign of the Euro bloc economy slipping back into recession again?
The news of the fallen German factory order sent shock waves across the finacial markets today. This lit up all the major currencies today like the Christmas Tree with movements of 100 to 600+ pips in the USDCHF. That was a significant move in one day considering its daily average below 200 pips.
Before the news, the market had expected a -1.4% report which equates to 3.2% fall but the factory orders delivered a whopping -2.8%. This lead a more open wound than expected.
When you compare these number to July report of 1.8% that saw a rise, it is no surprise to see the markets react this way. And that big differential of 4.6% was enough to cause chaos that tipped euro over the edge. What was more interesting were huge rises in the EURUSD, GBPUSD and most notably the swissy, USDCHF.
How long will this moves hold especially when are weaknesses in the market? The euro has since retrace back 50% of this morning’s gain.
From the US macro economic front, we await the Michigan ISM report this afternoon. As the factory order falls, such volatility in the market could trigger an avalanche of selling for the next one week or more. For now, we can brace ourselves for what the market does next.
