Forex Blog

First-hand Forex trading experience and information about foreign exchange market that will be useful to traders


EUR/USD Pauses Decline After Disappointing Report on US Jobless Claims, Resumes Drop Later

June 18, 2020 by

EUR/USD continued to fall during today’s trading session. The currency pair paused its decline for a short while following the release of a disappointing unemployment claims report but quickly resumed the drop later. Market analysts explained the fall by risk aversion on markets caused by fears of a new wave of the coronavirus pandemic.

Philadelphia Fed manufacturing index jumped from -43.1 in May to 27.5 in June. The surge surprised analysts who were expecting just a modest increase to -23.0. (Event A on the chart.)

Initial jobless claims fell just a little to 1,508k last week, seasonally adjusted from the previous week’s revised level of 1,566k (1,542k before the revision). Market participants were hoping for a bigger drop to 1,300k. (Event A on the chart.)

Leading indicators rose by 2.8% in May after dropping by 6.1% in April. It was better reading than an increase of 2.4% predicted by specialists. (Event B on the chart.)

Yesterday, a couple of reports were released (not shown on the chart.):

Housing starts and building permits rose in May. Housing starts were at a seasonally adjusted annual rate of 0.97 million, up from 0.93 million in April (revised, 0.89 million before the revision). Building permits were at a seasonally adjusted annual rate of 1.22 million, up from 1.07 million in the previous month. The median forecast predicted 1.10 million for housing starts and 1.23 million for building permits.

US crude oil inventories increased by 1.2 million barrels last week, whereas markets were expecting no change. The stockpiles swelled by 5.7 million barrels the week before. Total motor gasoline inventories decreased by 1.7 million barrels but remained above the five-year average for this time of year.

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

Leave a Reply

required (will not be published)