Euro strengthens on German factory orders

Story link: Euro strengthens on German factory orders

The Australian dollar lost value on Wednesday after the Reserve Bank of Australia surprised by leaving interest rates at 6.25 percent. Most analysts had expected the Bank to raise rates by 25 basis points to 6.5 percent. The decline proved to be short-lived, however, and it quickly rose to stand 0.6 percent higher versus the US dollar to $0.8180 as traders decided that the rate rise had not been cancelled but merely put off until next month.

The euro strengthened on the session after new figures showed German factory orders rose more than expected in February. The euro added 0.2 percent to £0.6765 in relation to sterling and gained 0.3 percent to $1.3370 against the greenback.

Despite the decline in relation to the euro, sterling gained versus the US currency, adding 0.1 percent to $1.9770 ahead of a new decision on interest rates from the Bank of England, due Thursday. Analysts tend to believe that any rate hike will come in May if it comes at all, although some have said that a rate increase this week would not be a complete surprise.

After early declines, the Japanese yen added 0.2 percent to ¥118.60 versus the US dollar, while it was even against the euro at ¥158.60.