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EUR/USD Rebounds Despite Stellar US Durable Goods Orders Report

August 26, 2020 by

EUR/USD was falling during Wednesday’s trading session. Some market analysts explained the decline by comments from a European Central Bank official who said that there is no lower bound for interest rates. But the currency pair has rebounded sharply despite a very good US durable goods orders report, though currently, the pair is still trading below the opening level. Now, traders wait for a speech of Federal Reserve Chairman Jerome Powell at the Jackson Hole symposium later this week.

Durable goods orders climbed by 11.2% in July. It was a far higher reading than 4.4% predicted by specialists. Furthermore, the previous month’s increase got a positive revision from 7.3% to 7.6%. (Event A on the chart.)

US crude oil inventories decreased by 4.7 million barrels last week, exceeding the forecast drop of 3.4 million barrels, but remained far above the five-year average for this time of year. The stockpiles decreased by 1.6 million barrels the week before. Total motor gasoline inventories decreased by 4.6 million barrels but also stayed above the five-year average. (Event B on the chart.)

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

S&P/Case-Shiller home price index rose by 3.5% in June, year-on-year. Analysts were expecting the same 3.6% rate of growth as in the previous month. Month-on-month, the index was up 0.2%.

Richmond Fed manufacturing index climbed from 10 in July to 18 in August versus market expectations of no change.

Consumer confidence fell to 84.8 in August from 91.7 in July instead of rising to 93.0 as analysts had predicted.

New home sales were at a seasonally adjusted annual rate of 901k in July, up from the revised June rate of 791k (776k before the revision). That was a total surprise to experts who had predicted a decrease to 787k.

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