EUR received some strength backed by Germany’s strong factory orders; USD weakens as Fed’s minutes remain the dovish stance

• EURUSD rises as German factory orders beat forecasts
• Dollar weakens as Fed minutes maintain dovish stance
• GBPEUR steady as UK released better-than-expected construction PMI
• China to begin its Digital Yuan campaign in the South China Sea contested islands

EURUSD rose by 0.2% today after the publication of Germany’s factory orders data for February. It is currently hovering around 1.191 with some considerable volatility at press time. The German factory orders increased by 1.2%, beating the forecasts and finally bringing some positive push on EUR. However, this uptrend might be short-lived as the Eurozone is still plagued by pandemic lockdowns. Germany and France, two major economies in the region, are still under lockdown restrictions to contain the virus. Euro traders could watch tomorrow’s release on Germany’s industrial production figures for February and trade balance report.

EURUSD’s rise could also partly attributable to USD’s weakness, which was brought by the Fed’s minutes and the less promising jobless claims. The Fed has confirmed that its dovish stance will continue and will maintain the loose monetary policy. It did acknowledge that growth was expanding and that the US had an advantage at least for the next few months compared with the European continent. On the other hand, the latest weekly jobless claims in the US landed at 744k, worse than expected.

GBPEUR has remained steady today despite EUR’s strength. This is brought by the sharp growth in UK’s construction sector. The construction PMI jumped to 61.7, versus the prior release at 53.3. This is the strongest growth since 2014. EURGBP is currently trading around 0.8669, about -0.03% since opening.

China will soon begin its campaign on the Digital Yuan in Sansha City, a disputed island located in the South China Sea. The campaign will last 2 weeks to promote the adoption on the digital currency. The city was established in 2012 and is located on the front line of disputes on territorial claims. National commercial banks will provide lucrative discounts such as 99-yuan discount for 100-yuan purchases to encourage consumption adoption. Pilot tests have already been conducted in Suzhou, Xiong’an, Shenzhen and Chengdu, with more coming up in 2021 such as Changsha, Qingdao, Shanghai, Hainan, Dalian, and Xi’an.