EUR/USD looks to post lowest daily close in four months near 1.0980
- Factory Orders in Germany declined 8.7% in 2019.
- US Dollar Index climbs to mid-98s on Thursday.
- Coming up: Industrial Production from Germany, NFP from US.
The EUR/USD pair came under strong bearish pressure during the American trading hours on Thursday and slumped to its lowest level since early October at 1.0964 before going into a consolidation phase in the last hour. As of writing, the pair was trading at 1.0977, erasing 0.2% on a daily basis.
Earlier in the day, the data published by Destatis revealed that Factory Orders in Germany declined 2.1% on a monthly basis in December and dragged the annual contraction rate to 8.7% to weigh on the shared currency. Meanwhile, the ECB in its monthly economic bulletin reiterated that the current monetary policy would help inflation buildup and sustain the expansion in the euro area. "Easier borrowing conditions are supporting consumer spending and business investment," the ECB further noted.
USD continues to outperform its major rivals
In the second half of the day, the greenback continued to gather strength to keep the bearish momentum intact.
The US Dollar Index rose above the 98.50 mark for the first time in nearly four months and caused the pair to break below the critical 1.10 handle.
The data from the US showed Unit Labor Costs increased 1.4% in the last quarter of 2019 and the Nonfarm Labor Productivity improved to +1.4% from -0.2% in the third quarter to provide an additional boost to the USD. Moreover, Dallas Fed President Kaplan said that he was in favour of the Fed keeping its policy rate unchanged throughout 2020.
On Friday, Industrial Production data from Germany will be looked upon for fresh impetus. During the American trading hours, the Nonfarm Payrolls (NFP) report will be the last significant catalyst for the greenback.
Technical levels to watch for