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EUR/USD Under Pressure from US & European Fundamentals

April 24, 2013

EUR/USD rallied today, but retreated later as fundamentals both in the United States and Europe were bad. The German business confidence worsened in April, adding to this week’s negative data. (Event A on the chart.) The report said: “Although the majority of companies assessed their current business situation as good, they were far more cautious than last month.” As for the US indicators, durable goods inventories fell much more than was expected.

Durable goods orders slumped 5.7% in March, almost at the same rate they grew in February (5.6%). This was the second decline in last three months. Market participants have anticipated smaller drop by 2.9%. (Event B on the chart.)

US crude oil inventories increased by 0.9 million barrels last week and are well above the upper limit of the average range for this time of year. The increase was two times below the forecast of 1.8 million barrels growth and followed the drop by 1.2 million barrels in the previous week. Total motor gasoline inventories decreased by 3.9 million barrels but remained in the upper half of the average range. (Event C on the chart.)

EUR/USD for 2013-04-24

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