(Wrong word in the first sentence replaced: strong)
FRANKFURT (dpa-AFX) – On Thursday, the euro gave up interim price increases again after strong US economic data. In the afternoon, the common currency was trading at $1.0840. It was thus at the level from early trading. The European Central Bank set the reference rate at 1.0899 (Wednesday: 1.0879) dollars. The dollar thus cost 0.9175 (0.9192) euros.
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Economic data from Germany was robust in the morning and gave the euro some boost in the morning. In the meantime, it had risen to $1.0900. German industry received significantly more orders than expected in May. Compared to April, 6.4 percent more orders were received. Analysts had expected a much lower average increase of 1.0 percent. However, the increase is also due to large orders, which can fluctuate significantly over time.
Bank economists put the initially strong numbers into perspective: the trend is pointing further down, said Commerzbank economist Ralph Solveen. Chief economist Thomas Gitzel from VP Bank even rates the order situation as critical: Despite a weak figure in the same month last year, incoming orders were down 4.3 percent compared to May 2022. “This reveals the whole misery.” The German economy will probably shrink in 2023 as a whole.
The euro gave back its gains in the afternoon. The reason was robust US data on the labor market and the service sector. At the start of trading, the private labor market service provider ADP reported an increase in employment that was well above expectations. In June, almost half a million jobs were added in the private sector. A strong labor market tends to support inflation. This could lead to further rate hikes by the US Federal Reserve, which should tend to support the dollar. In addition, the mood in the important service sector improved surprisingly significantly in June. The financial markets are now awaiting Friday’s official monthly US government jobs report.
For other important currencies, the ECB set the reference rates for one euro at 0.85310 (0.85685) British pounds, 156.57 (157.26) Japanese yen and 0.9757 (0.9782) Swiss francs. An ounce of gold was trading at $1,904 in London this afternoon. That was about $11 less than the day before./jsl/jkr/he