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EUR/USD Rallies Ahead of ECB Meeting, Erases Gains

September 4, 2012 by

EUR/USD was rising today, but erased its gains later and currently trades a little below the opening price. The earlier rally was caused by speculations that the European Central Bank will cut its interest rates and announce a bond buying program after the policy meeting on Thursday. The news from the United States was not encouraging. ISM data continued to show decline for manufacturing and construction spending unexpectedly fell.

ISM manufacturing PMI was at 49.6% in August, a little below the July figure of 49.8%. Market participants hoped for the neutral reading of 50.0. (Event A on the chart.)

Construction spending fell 0.9% in July from June. Analysts predicted that it would grow with the same rate as in June — 0.4%. (Event A on the chart.)

EUR/USD for 2012-09-04

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