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EUR/USD Fails to End Decline

July 17, 2014 by

EUR/USD rallied during the first half of the current trading session, attempting to end its two-day decline, but failed and headed for a third consecutive daily loss. The currency pair was pressed down by risk aversion caused by geopolitical tensions in Middle East and Easter Europe. As for US macroeconomic indicators, housing data was poor, while unemployment and manufacturing reports were surprisingly good.

Both housing starts and building permits fell in June. Housing starts were down from 985k to the seasonally adjusted annual 893k instead of rising to 1,020k as was predicted by analysts, while building permits declined from 1,005k to 963k instead of rising to 1,040k. (Event A on the chart.)

Initial jobless claims fell from 305k to 302k last week, surprising market participants who expected an increase to 310k. (Event A on the chart.)

Philadelphia Fed manufacturing index climbed from 17.8 in June to 23.9 in July. It was another pleasant surprise as most economists believed that the gauge would drop to 15.6. The report said that “the index has remained positive for five consecutive months and is at its highest reading since March 2011”. (Event B on the chart)


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