Euro jumps after upbeat German data

The euro jumped 0.2 percent against the dollar to a new intraday high on Tuesday after encouraging data from Germany which indicated that Europe’s largest economy is showing signs of recovery after contraction in the last quarter.

Germany factory orders jumped by a seasonally adjusted 2.2 percent in March, official data showed, compared to expectations for a 0.5 percent decline.

Year-over-year, German factory orders fell 0.4% in March, better than forecasts for a 2.9 percent decline.

Investors were relieved by the data since Germany is seen as Europe’s engine of growth and although it was mostly resilient to the euro zone crisis, its economy has been affected nevertheless.

EURUSD surged to a high of $1.3112 during late European trading before steadying around $1.3105.

Further gains are likely to be capped at resistance around $1.3158, last Thursday’s high, as a result of dovish remarks by European Central Bank President Mario Draghi yesterday.

Euro was weighed down when Draghi said the central bank was open to cutting rates again if necessary.

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