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EUR/USD Surges as Coronavirus Outbreak Continues

February 27, 2020 by

EUR/USD surged today as the coronavirus epidemic continued to spread around the world. Some analysts explained the surge by repricing of risks associated with the outbreak. They argued that, while the eurozone economy will likely be hit harder by the epidemic, markets were underestimating the impact of the outbreak on the US economy. As for US macroeconomic reports released today, they were generally decent, with unemployment claims being the only release that provided an unpleasant surprise.

Durable goods orders fell just 0.2% in January versus the forecast drop of 1.5%. The indicator rose as much as 2.9% the month before (revised up from 2.4%). (Event A on the chart.)

USD GDP advanced 2.1% in Q4 2019 according to the advance (second) estimate, the same as in Q3, in the advance (first estimate), and matching forecasts. (Event A on the chart.)

Initial jobless claims were at a seasonally adjusted level of 219k last week, whereas experts had predicted it to be unchanged from the previous week’s revised level of 211k. (Event A on the chart.)

Pending home sales rose by 5.2% in January versus the forecast decline of 2.8%. The previous month’s drop was revised from 4.9% to 4.3%. (Event B on the chart.)

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

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