The common currency slipped Monday after poor data out of Germany has investors speculating the economic future of that country. The dollar got some strength as the future of the U.S.-China trade talks and the current government shutdown at home remains uncertain.
German data pulls the euro lower
Industrial output for the European Union’s largest economy came out worse than expected, causing market watchers to ask whether the country is headed into a recession.
Industrial production in November declined 1.9% month over month, compared to estimates of 0.3% growth. The figure for October was revised down to -0.8% from -0.5%. Year-over-year production in November fell 4.7%.
The EUR/USD pair started the day up around 1.148 after a strong Monday. The pair fell as low as 1.143 before bouncing around and dipping to 1.142.
Eurozone data is relatively light, but we will see unemployment figures on Wednesday and the German ZEW Economic Survey on Friday.
Trump optimistic on trade talks
The U.S.-China trade talks in Beijing ended with both sides optimist about the discussions. However, the future still seems murky.
“Talks with China are going very well!” Trump tweeted Tuesday morning.
After calling a truce on Dec. 1, the two countries are looking to make a deal before March 1.
The general optimism had propelled the risk-on mood from Monday, but as few details were released from the talks, uncertainty settled in and the dollar gained.
Shutdown goes prime time
The U.S. government shutdown will get a prime-time television slot Tuesday night as President Trump addresses the nation.
Trump is expected to paint a picture of a security crisis on the U.S. southern border as he makes his case for the $5 billion he is demanding from Congress to build a border wall.
The government shutdown is now the second longest U.S. shutdown, adding to the uncertainty in the markets.