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EUR/USD Jumps on Positive German Business Climate

May 24, 2011 by

EUR/USD rose today after two sessions of decline. The decline of the currency pair was caused by concerns that the European economy is weakening, but the report about the German business climate (Event A on the chart) showed that the economic conditions remained stable. The US data was positive for the hosing market, but quite bad for the manufacturing. EUR/USD trades now at 1.4105.

New home sales were at a seasonally adjusted annual rate of 323k in April, above the revised March rate of 301k. A pleasant surprise to market participants, who expected growth to only 305k. (Event B on the chart.)

Richmond Fed manufacturing index fell to -6 in May from 10 in April, and that was an unpleasant surprise as it was expected to stay unchanged. Yet the reports said that “manufacturers were generally optimistic about their future prospects” despite the slowing activity. (Event B on the chart.)

EURUSD for 2011-05-24

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