The euro advanced against majority of its key counterparts in early deals on Wednesday as the forecast-beaten German factory orders driven by robust foreign demand signal that the region's economic recovery is intact.
However, gains were relatively subdued on caution ahead of tomorrow's key risk-events including rate decisions from the European Central Bank and the Bank of England.
Germany's factory orders grew 3.3 percent in September from the previous month, official data showed Wednesday. Orders were forecast to grow 0.5 percent, following a 0.3 percent drop in August.
Domestic orders decreased by 1 percent, while the business with foreign customers increased 6.8 percent.
At the same time, euro-zone's private sector business activity expanded at a slightly faster pace than previously estimated in October, detailed results of a survey by Markit Economics showed today.
The composite output index, an indicator that measures performance of both manufacturing and service sectors, came in at 51.9, higher than the flash reading of 51.5. In September, the index stood at 52.2, a 27-month high.
The services business activity index scored 51.6 in October, up from the preliminary reading of 50.9. This was lower than 52.2 in September.
Meanwhile, retail sales in the euro area declined slightly more than expected in September driven by the weakness in both food and non-food product turnover, the eurostat data showed today.
The volume of retail sales dropped 0.6 percent month-on-month, reversing August's 0.5 percent rise. Economists had forecast sales to fall 0.4 percent in September.
Industrial production in the U.K. rebounded stronger-than-expected in September after two consecutive declines. Total production rose 2.2 percent year-on-year in September following a 1.5 percent fall in August and a 1.1 percent decline in July. The consensus was for an increase of 1.8 percent.
On a monthly basis, total production increased 0.9 percent compared with forecast for a 0.6 percent gain. Factory output increased 1.2 percent in September from a month earlier, a tad faster than 1.1 percent rise expected.
Elsewhere, the members of the Bank of Japan monetary policy board said that Japan's economy continues to show signs of recovery - particularly as exports extend their growth, minutes from the board's meeting on October 3 and 4 revealed today.
The euro advanced to a 5-day high of 1.3532 against the US dollar, moving off after a successful re-testing of the 50-day simple moving average level in the pair. Maintaining the present bullish momentum could help the pair lifting towards its next major resistance around the 1.36 area.
The common currency continued to stay above the 1.23 area against the Swiss franc for the second consecutive day, rising as much as 1.2324, a tad above its 200-day SMA at 1.2315. Next likely target for the pair is seen at its trend-line resistance around 1.2350.
Upbeat data also provided a temporary reprieve for the euro against the yen, snapping back to 133.44 around 6:00 am ET from a session's low of 132.86. Although the pair stays a pip short of Asian session's 5-day high of 133.45, overall technical picture shows a bullish extension towards the 133.80 resistance area.
The euro erased some of its losses it incurred against the pound in early deals, snapping back above 0.84 from nearly a 5-week low of 0.8378 hit following the upbeat UK industrial production data. Further cues in the upcoming sessions are decisive for the currency cross to either extend its recovery or resume its 6-day bearish trend.
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Forex News
May 08, 2026 15:50 ET Manufacturing and services sector survey results and labor market data from main economies were the highlight on the economics news front this week. Factory orders and jobs report dominated the news flow in the U.S. Similarly, industrial production data from German garnered attention in Europe. In Asia, purchasing managers’ survey results from China and the central bank decision from Australia were in focus.