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EUR/USD in Downtrend — Better-than-Expected US Data Helps

April 1, 2020 by

The US dollar has managed to strengthen against the euro today despite the exponentially increasing number of COVID-19 positives in the United States. Some of the important macroeconomic indicators that were released in the USA today came out better than expected, which helped the greenback against other currencies.

ADP employment dropped by 27k in March. Even though the change was much worse than February’s growth by 179k, it was still much better than the median forecast of a decline by 150k jobs. The number is even more surprising considering the last week’s horrendous initial jobless claims release. (Event A on the chart.)

Markit manufacturing PMI fell from 50.7 in February to 48.5 in March according to the final report for the month of March. It was previously reported at 49.2 (in a flash estimate) and was expected to go down to 48.2. (Event B on the chart.)

ISM manufacturing PMI went down from 50.1 to 49.1 in March. A much steeper drop (to 44.9) had been priced in by market participants. (Event C on the chart.)

Construction spending declined by 1.3% in February, following a 2.8% increase (revised from 1.8%) in January. The spending was expected to grow by 0.6%. (Event C on the chart.)

US crude oil inventories rose by 13.8 million barrels last week, surprising traders who were waiting for a 3.7 million barrels change. The inventories are now near the 5-year average for this time of year. A week earlier, the reserves added just 1.6 million barrels. Total motor gasoline inventories increased by 7.5 million barrels and are now above the 5-year average. (Event D on the chart.)

EUR/USD as of 2020-04-01

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