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EUR/USD Rises as U.S. Housing Market Shows Awful Results

June 23, 2010 by

EUR/USD advanced today after a sharp decline as the U.S. housing market continues to show terrible results. New homes sales posted a really depressing value. FOMC kept the low interest rates and hinted that it may keep the rates for a long time. EUR/USD trades near 1.2325 now.

New homes sales release continued the streak of dissapointing results from the housing market, sinking to 300k in May from the negatively revised April reading of 446k. This figure was really dissapointing for market participants, who expected much smaller decline to 424k.

U.S. crude oil inventories increased by 2.0 million barrels from the previous week. Total motor gasoline inventories decreased by 0.8 million barrels last week. Both are above the upper limit of the average range.

FOMC left the interest rates unchanged at range from 0% to 0.25%, as was expected by Forex traders. It stated that the economic recovery continues, but the economic growth encountered some obstacles like high level of unemployment. The statement hinted FOMC might keep the low interest rates for an extended period:

…economic conditions, including low rates of resource utilization, subdued inflation trends, and stable inflation expectations, are likely to warrant exceptionally low levels of the federal funds rate for an extended period.

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

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