Euro Rises As European Shares Traded Higher

(RTTNews) - The euro strengthened against other major currencies in the European session on Wednesday, as European shares traded higher despite weak factory orders data from Germany and fresh tariff threats from U.S. President Donald Trump on pharma and chips. Some upbeat earnings announcements and expectations of a Fed interest rate cut next month appear to be aiding sentiment.

Investors mood is a bit positive amid hopes the Fed will cut interest rate next month.

The U.S. President has called a pledge of investment totaling $600 billion made in the EU-U.S. trade deal a gift and threatened the EU with 35% blanket tariffs if it fails on the pledge.

Trump also said that tariffs on semiconductor and chip imports would be announced as soon as next week to boost U.S. manufacturing and that planned tariffs on pharmaceuticals imported into the U.S. could eventually reach as high as 250%.

Investors look forward to U.S. President Donald Trump's decision on Federal Reserve appointments. By the end of the week, Trump might reveal a nominee to fill the vacancy on the Fed's Board of Governors.

German new factory orders fell 1.0 percent 1.0 percent month-on-month in June, confounding expectations for an increase of 1.0 percent, according to figures from Destatis. The fall was also sharper than the 0.8 percent decrease posted in May.

In other economic news, data from Eurostat showed that Eurozone retail sales recovered in June suggesting that household spending supported economic growth in the third quarter. Retail sales grew 0.3 percent on a monthly basis in June, offsetting May's 0.3 percent decline. However, this was marginally weaker than economists' forecast of 0.4 percent increase.

On a yearly basis, retail sales growth accelerated to 3.1 percent from 1.9 percent in May. Economists were expecting an annual growth of 2.6 percent.

The HCOB Eurozone Construction PMI edged down to 44.7 in July from 45.2 in the previous month, marking its steepest decline since February. In the European trading today, the euro rose to 9-day highs of 1.1611 against the U.S. dollar and 0.9368 against the Swiss franc, from early lows of 1.1564 and 0.9342, respectively. If the euro extends its uptrend, it is likely to find resistance around 1.18 against the greenback and 0.95 against the franc.

Against the yen and the pound, the euro advanced to a 5-day high of 171.46 and a 2-day high of 0.8721 from early lows of 170.62 and 0.8697, respectively. The euro may test resistance around 173.00 against the yen and 0.88 against the pound.

Looking ahead, U.S. weekly mortgage approvals data, Canada S&P Global PMI reports for July and U.S. EIA crude oil data are slated for release in the New York session.