RTRS: FOREX-Euro slips as weak German orders data stings
By Naomi Tajitsu
LONDON, Feb 7 (Reuters) - The euro slipped to a session low against the dollar on Monday after a weak reading of German industrial orders accelerated profit-taking prompted by data on Friday showing a lower U.S. jobless rate.
German industrial orders fell 3.4 percent on the month in December, more than forecasts for a 1.5 percent fall, due to weak demand outside the euro zone. The data highlighted the German economy's reliance on external demand. [ID:nLDE7160ZR]
Investors also sold the euro as they pared back expectations of a European Central Bank rate rise, while analysts said the currency's near-term direction would hinge on discussions about strengthening the euro zone economy and its debt rescue fund.
"A lot of the optimism in the market is already priced into the euro, so if you unwind that you get a 3-4 point fall," said Peter Frank, currency strategist at Societe Generale.
"For the euro to rally, you need significant positive headlines from the core economies in regards to the EFSF fund and measures for periphery countries."
By 1213 GMT, the euro EUR= had fallen 0.4 percent on the day to $1.3534, extending losses made after U.S. nonfarm payrolls data on Friday.
The German data triggered stop-loss orders on the downside, overtaking earlier demand from Asian names, after most Asian markets resumed trading after the lunar new year holidays.
Further losses in the euro were limited for the moment by support around $1.3530, its 100-day moving average. The dollar was supported after investors brushed off a smaller-than-expected rise in January U.S. payrolls late last week and instead focused on drop in the jobless rate to 9.0 percent from 9.8 percent in November.
The data is unlikely to prevent the Federal Reserve from completing its $600 billion government bond-buying programme to support the economy, but signs of underlying strength in the labour market boosted U.S. bond yields.
"One employment report is not a secure sign for a change in monetary policy," said Manuel Oliveri, currency analyst at UBS in Zurich.
