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EUR/USD Flat After Bunch of Good US Economic Reports

February 20, 2020 by

EUR/USD traded flat today, attempting to rally intraday but retreating by now. US macroeconomic reports released over the current trading session were solid, supporting the dollar.

Philadelphia Fed manufacturing index jumped sharply from 17.0 to 36.7 in February, reaching the highest level since February 2017. That was contrary to analysts’ forecasts of a decline to 10.0. (Event A on the chart.)

Initial jobless claims rose to the seasonally adjusted level of 210k last week from the previous week’s value of 206k. The actual figure matched the consensus forecast exactly. (Event A on the chart.)

Leading indicators rose by 0.8% in January, following a 0.3% decline in December. The actual increase was two times the forecast gain of 0.4%. (Event B on the chart.)

US crude oil inventories rose by 0.4 million barrel last week but were below the five-year average for this time of year. The actual increase was nowhere near the forecast gain of 3.3 million barrels. The stockpiles swelled by 7.5 million barrels the week before. Total motor gasoline inventories dropped by 3.0 million barrels but remained above the five-year average. (Event C on the chart.)

On Tuesday, a couple of reports were released (not shown on the chart):

NY Empire State Index climbed sharply from 4.8 to 12.9 in February, far above the forecast figure of 5.1.

Net foreign purchases were at $85.6 billion in December. That is compared with the forecast value of $31.4 billion and the previous month’s reading of $27.1 billion.

Yesterday, several reports were released (not shown on the chart):

PPI rose by 0.5% in January on a seasonally adjusted basis, while market participants were expecting the same 0.1% rate of growth as in the previous month.

Both housing starts and building permits rose in January. Housing starts were at a seasonally adjusted annual rate of 1.57 million, down from 1.63 million in December but above the forecast value of 1.40 million. Building permits were at a seasonally adjusted annual rate of 1.55 million, up from 1.42 million in the previous month and above the median forecast of 1.45 million.

FOMC released minutes of its January monetary policy meeting. The notes mentioned both positive and negative factors to global growth, which can also affect the US economy. On the positive side, “some trade uncertainties had diminished recently, and there were some signs of stabilization in global growth”. As for the negative side, the minutes said:

Geopolitical risks, especially in connection with the Middle East, remained. The threat of the coronavirus, in addition to its human toll, had emerged as a new risk to the global growth outlook, which participants agreed warranted close watching.

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

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