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EUR/USD Up After FOMC Meeting, Poor US Data

May 1, 2013 by Vladimir Vyun

Today’s session was a busy one as there were quite a few economic reports from the United States as well as the monetary decision of the Federal Reserve. As was expected, the Fed maintained quantitative easing. All today’s reports were worse than expected, suggesting that the US central bank will not abandon stimulating measures anytime soon. Such prospects pushed EUR/USD higher. As of now, the currency pair struggles to keep gains.

ADP employment rose 119k in April. It was a disappointment as market participants have anticipated growth by at least 154k. Furthermore, the March increase was revised from 158k down to 131k. (Event A on the chart.)

ISM manufacturing PMI was at 50.7% in April, down from 51.3% in March. Analysts predicted a drop to 51.0%. (Event B on the chart.)

Construction spending dropped 1.7% in March from February when it rose 1.5% (revised from 1.2%). The consensus forecast promised an advance by 0.7%. (Event B on the chart.)

Crude oil inventories increased by 6.7 million barrels last week (compared to the forecast of 1.2 million and the previous week’s 0.9 million) and are well above the upper limit of the average range for this time of year. Total motor gasoline inventories decreased by 1.8 million barrels and are in the middle of the average range. (Event C on the chart.)

FOMC concluded its two-day meeting today and announced its decision. (Event D on the chart.) As was expected, there was no change to the monetary policy. The Committee hinted that the economy could fare better if not the ineffectiveness of politicians:

Household spending and business fixed investment advanced, and the housing sector has strengthened further, but fiscal policy is restraining economic growth.

EUR/USD for 2013-05-01

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