German factory orders rose 1.9% in May, beating forecasts, but US-Iran tensions curb risk appetite and lift the USD.
The EUR/USD pair retreated to 1.1415 on Monday, erasing gains from late last week, as geopolitical concerns overshadowed upbeat German economic data. The US Dollar Index (DXY) climbed above 101.00, recovering from Friday’s lows near 100.60.
German factory orders surged 1.9% month-on-month in May, exceeding the 1.2% consensus and reversing part of April’s 3.2% decline. Eurozone investor confidence also improved, with the July Sentix index rising to -3.1 from -13.4 in June. However, escalating US-Iran tensions, including disputes over Strait of Hormuz fees and heightened rhetoric between Iran and Israel, dampened market sentiment.
The Greenback’s strength persisted despite the positive data, reflecting cautious investor positioning amid uncertainty over the ceasefire’s durability.