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EUR/USD Erases Gains as Fitch Downgrades Hungary’s Rating

December 23, 2010 by

EUR/USD extended its losses, after it advanced earlier today, as Fitch Ratings cut of Hungary’s credit rating and put Greece’s rating on review for downgrade. US macroeconomic data was generally in line with forecasts and showed a moderate improvement of economy. A notable exception was durable goods orders, which were far worse than predicted. EUR/USD trades at 1.3065 now after it rose previously as high as 1.3151.

Initial jobless claims in the US from 423k to 420k last week, in line with forecasts, which were promising a decline to 421k.

Durable goods orders decreased 1.3% in November, following a 3.1% October decrease. The reading was noticeably below the predicted value of 0.5%.

Personal income and spending continued to rise last month. Personal income increased 0.3% in November, exactly as was predicted by analysts. Personal spending increased 0.4%, somewhat less than was anticipated by market participants, who expected a 0.5% growth. In October personal income increased 0.4% personal spending increased 0.7% based on revised estimates.

The revised University of Michigan consumer sentiment index was 74.5 in the December, up from 71.6 in November. The index hasn’t changed much from the preliminary estimate of 74.2 and was near economists’ forecast of 74.7. Sentiment improved because of better conditions on jobs market but remained quite depressed.

New home sales were at a seasonally adjusted annual rate of 290k, above the October rate of 275k but below the economists’ estimate of 301k.

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

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