German Factory Orders Disappoints as Exports Falter

EURUSD – Germany exports fell another 0.7% in February after posting a revised 7.4% decline in previous month, while imports plunged 4.2% during the month amid expectations for a 2.3% drop. As a result, the trade report crossed the wires better than expected as the surplus widened to EUR 8.7B despite projections for a decline to 7.5B. Meanwhile, a separate report showed that German factory orders plunged another 3.5% in February after falling 6.7% in the previous month, while the annualized reading slipped to -38.2% from a revised reading of -36.8% in January, extending their worst decline on record as the downturn in the global economy eroded demand from home and abroad.

GBPUSD – The U.K. BRC shop price index advanced 0.4% during the month after rising 1.2% in February, which raised the annual rate to 2.0% in March. The BRC quoted rising food and import prices as the main cause behind the pick-up in prices, and the data suggests that the Bank of England may adopt a neutral policy stance going forward as the benchmark interest rate remains at a record-low. Meanwhile, the NIESR’s GDP estimate increased to -1.5% in March, compared to -1.6% in the previous month, and the statement accompanying the release said that the current downturn looks “very similar to that of the recession that began in the summer of 1979” and warned that economic activity may remain subdued for another year, and went onto say that it will take nearly two-years for the economy to recover.