EUR/CAD Steadies After German Factory Orders Data

EUR/CAD steadied around 1.6040 during early European trading on Friday, following a bullish gap open and a slight pullback. Germany's latest factory orders data came in strong, providing support for the euro.

**German Orders Data Far Exceeds Expectations**

Data showed German factory orders rose 2.5% month-on-month in July, well above the market forecast of 0.3% and extending the upward momentum from June's 3.7% gain. On a year-on-year basis, the increase reached 13.1%, nearly double June's 7.2% rise. The figures indicate an unexpected acceleration in German manufacturing demand at the start of the third quarter, temporarily easing concerns over a sharp slowdown in the eurozone's largest economy.

**Euro Gets Temporary Boost**

In response, the euro held steady across crosses. Although EUR/CAD failed to hold its opening gap higher, the pair found support around 1.6040 with limited volatility. Market reports noted that German consumer confidence data had also been strong earlier, and a recent run of positive economic indicators is helping the euro stabilize against other major currencies.

**Key Points to Watch Ahead**

However, monthly orders data are volatile, and German manufacturing orders have previously seen sharp declines. Market analysts suggest that whether EUR/CAD can strengthen further will depend on whether subsequent data confirm the sustainability of the manufacturing recovery, as well as relative shifts in monetary policy expectations between the European Central Bank and the Bank of Canada.