The U.S. dollar posted its sharpest decline versus the euro today despite a gross domestic product report published today showed growth in the North American economy for last year’s final quarter. Existing home sales slid much beyond forecasts, allowing the euro to pare a good amount of this week’s losses. EUR/USD currently trades at 1.3674.
Preliminary GDP report for last year’s fourth quarter showed a growth of 5.9%, from the previous advance report that showed showed an increase of 5.7%. Forecasts expected a decline to 5.6%, being the GDP numbers an optimistic sign of recovery in the U.S. economy.
Existing home sales declined to a seasonally adjusted annual rate of 5.05 million units in January from a previous revised reading of 5.44 million units in December. The actual figures came considerably below forecasts that expected 5.51 million units sold.
Michigan Consumer Sentiment index declined to 73.6 in February from a previous reading of 73.7 in January. Forecasts expected this important confidence index to be at 74.0.
Chicago PMI rose to 62.6 in February from a previous reading of 61.5 in January. Forecasts missed out once again expecting a decline to 59.6 for this business barometer index.
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March 2nd, 2010 at 2:38 am
I think this is due to still a lot of unceirtanty around Europe and the Greece situation. The GDP isn’t as important as the Europe situation and I think that most of the traders are waiting what will happen with Greece.
If Europe doesn’t come up with a good plan for the Greece situation, the dollar is going to strengthen tremendously against the euro.
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Jan Baros Reply:
March 3rd, 2010 at 5:07 am
yes i agree with you totally, it’s also important to remember that not only Greece, but several other Eurozone countries are facing a similar situation and these situations are likely to make the headlines at some point in the near future.
A part from that the pound is likely to be the biggest loser this year, it has similar issues as Greece does, plus it lacks a solid government, plus it doesn’t have the ECB support.
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