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  • German Factory Orders rose 4.5% MoM in August.
  • On a yearly basis, Germany’s Factory Orders dropped 2.2% in August.
  • EUR/USD ignores upbeat German Factory data, stays below 1.1800.

The German Factory Orders improved more-than-expected in August, suggesting that the manufacturing sector recovery in Europe’s largest economy is regaining traction.

Contracts for goods ‘Made in Germany’ arrived at +4.5% on the month vs. +2.6% expected and +2.8% last, the latest data published by the Federal Statistics Office showed on Tuesday.

On an annualized basis, Germany’s Industrial Orders dropped only by 2.2% in the reported month vs. -7.3% previous and -19.9% expectations.

About German Factory Orders

The Factory orders released by the Deutsche Bundesbank is an indicator that includes shipments, inventories, and new and unfilled orders. An increase in the factory order total may indicate an expansion in the German economy and could be an inflationary factor. It is worth noting that the German Factory barely influences, either positively or negatively, the total Eurozone GDP. A high reading is positive (or bullish) for the EUR, while a low reading is negative.

FX implications

The shared currency showed little reaction to better-than-forecasts German Factory Orders data, with EUR/USD keeping its range play intact below 1.1800.

All eyes on the speeches by the ECB President Christine Lagarde and Fed Chief Jerome Powell.