When are the German Factory Orders and how could they affect EUR/USD?

German Factory Orders overview

Germany is set to release German factory orders data at 06:00 GMT on Wednesday. The data is expected to show the total value of new purchase orders placed with manufacturers for both durable and non-durable goods fell by 10% month-on-month in March following a 1.4% decline in February. 

Manufacturing PMI fell in March

IHS Markit’s Purchasing Managers’ Index (PMI) for manufacturing dropped to 45.4 in March, signaling the sharpest drop in manufacturing output since April 2009. 

The decline was caused by the coronavirus outbreak and the containment measures, which took effect in the second half of March.

Factory orders, therefore, are likely to have suffered a big drop in March, as expected by economists. 

Impact on Euro

The single currency is on the defensive, having dropped by more than 150 pips over the past two days. Markets offered Euros on Tuesday after Germany's top court ruled that the European Central Bank's bond-buying program partly violates the German constitution.

The already weak Euro will likely suffer deeper losses if the German data prints weaker-than-expected. A big beat on expectations may put a temporary floor under the single currency, although the respite may be temporary.

Moreover, the German court's ruling has added to uncertainty and could fuel the impression that the EZ is far from a dynamic, unified entity, as noted by Reuters. 

About Factory Orders

The Factory orders released by the Deutsche Bundesbank is an indicator that includes shipments, inventories, and new and unfilled orders. An increase in the factory order total may indicate an expansion in the German economy and could be an inflationary factor. It is worth noting that the German Factory barely influences, either positively or negatively, the total Eurozone GDP. A high reading is positive (or bullish) for the EUR, while a low reading is negative.