Forex Blog

First-hand Forex trading experience and information about foreign exchange market that will be useful to traders

Archives

EUR/USD Rallies Even as Eurozone CPI Slows

May 16, 2013 by

EUR/USD rallied today, erasing its earlier decline, even as eurozone annual inflation was down from 1.7% in March to 1.2% in April. (Event A on the chart.) Absence of inflation pressure should allow the European Central Bank to ease its monetary policy further if it deems such action necessary. Data from the United States continued to frustrate traders. The manufacturing index was particularly disappointing as it unexpectedly fell this month.

CPI slipped 0.4% in April on a seasonally adjusted basis. The drop was more than the forecast 0.3% and the March’s 0.2%. (Event B on the chart.)

Initial jobless claims jumped from 328k to 360k last week. Analysts have anticipated an increase, but thought that it would be much smaller, just to 332k. (Event B on the chart.)

Housing starts were at the seasonally adjusted annual rate of 853k in April, falling from the previous month’s 1.02 million. Market participants have hoped for smaller decrease to 980k. At the same time, building permits rose from 890k to the seasonally adjusted annual rate of 1.02 million, beating the forecast of 940k. (Event B on the chart.)

Philadelphia Fed Manufacturing Index decreased from 1.3 in April to -5.2 in May. It was an unexpected reading as traders have thought that the gauge would rise to 2.5. The report said: “All of the survey’s broadest current indicators were negative this month, indicating weaker conditions compared with April.” (Event C on the chart.)

EUR/USD for 2013-05-16

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

Leave a Reply

required
required (will not be published)
optional