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EUR/USD Crashes as Traders Digest Tapering News

January 30, 2014 by

EUR/USD had a muted reaction on the Federal Reserve tapering yesterday, but came crushing down today after traders digested the news. Even worse-than-expected reports from the United States did not prevent the dollar from gaining on the euro.

US GDP grew 3.2% in the fourth quarter of 2013 according to the advance estimate. The actual change was smaller that predicted 3.3% and previous quarter’s 4.1%. (Event A on the chart.)

Initial jobless claims jumped from 329k to 348k last week, seasonally adjusted, much more than was predicted by analysts (to 331k). (Event A on the chart.)

Pending home sales slumped 8.7% December, instead of falling by just 0.1% as was predicted by experts. The November’s change was revised downwardly from 0.2% to -0.3%. (Event B on the chart.)

EUR/USD-2014-01-30

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