EUR/USD is expected to expand further, approaching the 1.1535 range, as German industrial production continues to grow at a constant pace, 0.80% annually and 0.20% monthly in September, strongly supported by the automotive sector. Factory orders continued to progress, with a monthly rise of 0.30% thanks to higher machinery and equipment orders.
The positive economic news comes after the announcement of Chancellor Merkel’s last term ending in 2021 and the continued weakening of Germany coalitions in Bavaria and Hesse state elections. Germany is showing signs of robustness as industrial activities remain solid. Along with high performance of the automotive industry, other sectors have been progressing sideways since the beginning of this year. We expect German Q4Q GDP to bounce back.