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EUR/USD Rallies on a Slew of US Fundamental Reports

May 28, 2020 by

The US dollar declined against the euro following some poor macroeconomic indicators that have been reported in the United States today. The euro started to rise on the particularly dismal GDP report and continued to appreciate after other announcements too.

GDP declined by -5.0% in the first quarter of 2020 according the preliminary (second estimate) report — this compares to -4.8% reported in the advance estimate and to the 2.1% growth reported for the fourth quarter of 2019. Traders expected the preliminary number be the same as the advance estimate. (Event A on the chart.)

Durable goods orders went down by 17.2% in April after dropping by 14.7% in March. The decline was slightly better than the 19% drop predicted by FX analysts. (Event A on the chart.)

Initial jobless claims decreased to 2,123k from 2,446k last week. The number was somewhat above the median forecast of 2,100k. (Event A on the chart.)

Pending home sales fell by 21.8% year-on-year in April after declining by 20.8% in March. Market participants expected a much slower decline at -15%. (Event B on the chart.)

Crude oil inventories added 7.9 million barrels during the week ending May 22 after decreasing by 5 million barrels a week earlier. The median forecast was for the decline to continue (at a pace of 2.5 million barrels per week). Total motor gasoline inventories decreased by 0.7 million barrels during the same period. (Event C on the chart.)

Yesterday, a report on Richmond Fed manufacturing index was released, showing a growth from -53 to -27 for the month of May. It was better than -40 forecast by specialists. (Not shown on the chart.)

EUR/USD as of 2020-05-28

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