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EUR/USD Continues to March Higher, Reaches Multi-Year High

December 17, 2020 by

EUR/USD continued to move higher, reaching the highest level since April 2018. Today’s US macroeconomic data was mixed, with worse-than-expected manufacturing and employment reports but good housing data. Some market analysts speculated that the currency pair rallied due to the unexpected rise of US jobless claims. But the pair has started to rise before the release and actually halted the rally afterward, moving largely sideways. The more likely reason was the outlook for a stimulus package from the US government.

Philadelphia Fed manufacturing index tumbled from 26.3 in November to 11.1 in December, far below the value of 20.1 predicted by analysts. (Event A on the chart.)

Initial jobless claims were at 885k last week, seasonally adjusted, down from the previous week’s upwardly revised level of 862k (853k before the revision). Market participants were hoping for a drop to 817k. (Event A on the chart.)

Housing starts and building permits rose in November. Housing starts were at a seasonally adjusted annual rate of 1.55 million, whereas experts were expecting them to stay at October’s level of 1.53 million. Building permits were at a seasonally adjusted annual rate of 1.64 million, and in this instance specialists were also expecting them to stay little changed from the previous month’s value of 1.54 million. (Event A on the chart.)

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

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