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EUR/USD Climbs Despite Coronavirus Threat

March 2, 2020 by

EUR/USD rallied today despite the continuing threat of the coronavirus. Various analysts provided different explanations for the rally. But most of them agreed that the rally can easily end abruptly as the eurozone economy looks extremely fragile. As for US macroeconomic data, manufacturing indicators fell dangerously close to the neutral level of no-growth, while construction spending beat forecasts significantly.

Markit manufacturing PMI fell from 51.9 in January to 50.7 in February according to the final estimate, which was little changed from the flash estimate of 50.8. The actual figure matched analysts’ expectations. (Event A on the chart.)

ISM manufacturing PMI fell to 50.1% in February from 50.9% in January, below the consensus forecast of 50.5%. The value was barely above the 50.0% level of no-growth. (Event B on the chart.)

Construction spending demonstrated an increase of 1.8% in the period from December to January. It was three times bigger than the forecast gain of 0.6%. The previous month’s reading got a positive revision from a drop of 0.2% to an increase of 0.2%. (Event B on the chart.)

If you have any comments on the recent EUR/USD action, please reply using the form below.

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