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EUR/USD Volatile After ECB Meeting, US Data

April 30, 2020 by

EUR/USD demonstrated significant volatility today. The currency pair did not react much to the slump of eurozone GDP (event A on the chart) and had a seeming calm reaction to the European Central Bank monetary policy decision (event B on the chart) and the accompanying press conference (event C on the chart). But the pair sank soon after the press conference only to skyrocket afterward. Currently, the EUR/USD pair trades above the opening level. One of the possible reasons for the bounce was very poor US macroeconomic data. Another one is the announcement from the Federal Reserve about an expansion of the scope and eligibility for the Main Street Lending Program, which was created to help small and medium businesses during the COVID-19 pandemic. (Event E on the chart.)

Seasonally adjusted initial jobless claims dropped to 3,839k last week from the previous week’s revised level of 4,442k (4,427k before the revision). Market participants were hoping for a bigger drop to 3,500k. (Event C on the chart.)

Personal income and spending plunged in March. Personal income dropped by 2.0% after rising by 0.6% in February. Personal spending tanked by 7.5% following a 0.2% increase in the preceding month. Experts had forecast a drop of 1.6% on income and 4.8% for spending. Core PCE inflation was at -0.1%, matching market expectations, after logging a reading of 0.2% in February. (Event C on the chart.)

Chicago PMI collapsed to 35.4 in April from 47.8 in March. It was the lowest level since March 2009. The median forecast promised a slightly better reading of 38.0. (Event D on the chart.)

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

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