Euro dips further as grim German data adds to political uncertainty and debt issues
The Euro (EUR) keeps heading lower against a firmer US Dollar (USD) on Tuesday, as growing political uncertainty and a deteriorating fiscal outlook have renewed fears of debt contagion in the region.
The Euro has been sliding further against the US Dollar due to mounting political uncertainty and a deteriorating fiscal outlook in Europe. Germany's Factory Orders for August fell by 10.6% from July, despite a slight recovery earlier in the day, which saw the EURUSD pair near 1.1230. The decline was mainly driven by a 61% drop in transport equipment sales, which had doubled in July.
France is also grappling with a political stalemate, further compounding the uncertainty. The ECB is caught in a dilemma, as further monetary tightening could exacerbate the bonds sell-off, but inflation remains stubbornly high. Meanwhile, US yields and geopolitical tensions support the US Dollar, adding to the Euro's decline.
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