In continuing a trend seen around the world this past week, the euro zone has also published an industrial new orders report which fell short of expectations. The effect at this point is unknown given that most traders are focused on the Fed’s rate statement.
Yesterday a similar report was published by Great Britain which revealed a sharp decline in industrial order expectations. The diminished sentiment pulled down on the pound in the short-term and may have longer lasting effects if other economies experience a similar lag in industry.
Today’s report out of the euro zone partially confirms the fear that the industrial sector is faltering worldwide. Part of the explanation could be the downturn we’ve seen since the earthquake in Japan, combined with a slow-down in trade resulting from soaring oil prices.
But industrial orders are also associated with consumer and producer sentiment towards the economy. This report highlights the more sinister aspect of rising pessimism among the industrial sector. Should such an outlook become more pronounced the engine of the global economy could start to falter as well.
In viewing today’s figures out of the euro zone, traders should try to gauge what impact it will have once the fervor over today’s Fed statement runs out. The loose monetary policy of the US Federal Reserve is cause for concern among dollar traders, but the global decline in industry may have a greater effect in the long run.
Other relevant articles you may like
Greg Holden is the Chief Market Analyst at ForexYard. Greg uses his detailed knowledge of fundamental and technical analysis to provide some of the leading market forecasts in the forex world today. A guest lecturer at forex symposiums and Chief Editor of ForexYard's analysis center, Greg brings highly detailed and easy-to-use market analyses to his clientele. He has been published on ForexYard's Trading Blog and affiliate websites. Greg holds degrees in Political Science and Economics from Missouri State University, as well as a Masters degree in Middle Eastern History.
