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EUR/USD Continues to Slide on Negative Interest Rates Talks

March 27, 2014 by

EUR/USD continued to fall today as European policy makers continued to talks about the possibility of negative interest rates. The drop slowed though, and the currency pair trades not far from its opening level. In the United States, the economic reports were mostly disappointing (with the exception of unemployment claims), but the dollar did not pay attention to this.

Initial jobless claims fell from 321k to 311k last week. It was a nice surprise to those dollar bulls who had feared that unemployment claims would rise to 326k. (Event A on the chart.)

US GDP grew at the annual rate of 2.6% in Q4 2013 according to the final estimate. It was faster growth than in the preliminary estimate (2.4%) but was still slightly below the forecast (2.7%) and significantly slower than the third quarter’s growth (4.1%). (Event A on the chart.)

Pending home sales dropped 0.8% in February. This is compared to the predicted increase of 0.1% and the downwardly revised January change of -0.2%. The report was not completely negative though, saying that “the recent slowdown in home sales may be behind us, while home prices continue to rise” and “the market appears to be stabilizing”. (Event B on the chart.)

EUR/USD-2014-03-27

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