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Hopes for Spain Push EUR/USD Higher

August 28, 2012 by

EUR/USD traded above the opening level today, following two session of decline, on speculations that Spain would get a bailout soon and as the country successfully performed its bill auction. The US fundamentals were mixed. Data confirmed that the US housing market is recovering, while manufacturing contracted with slower pace. At the same time, consumer sentiment unexpectedly worsened this month.

S&P/Case-Shiller home price index rose from 139.99 in May to 141.31 in June. The index was up 0.5% from June 2011 (seasonally adjusted), following the decline by 0.7% in May. The report was very good, considering that specialists expected a drop by 0.3%. The index registered the first annual growth since September 2010. (Event A on the chart.)

Richmond Fed manufacturing index ticked up from -17 in July to -9 in August. The actual data was better than the predicted value of -11. (Event B on the chart.)

Consumer confidence fell to 60.6 in August. That reading is worse than the expected 65.8 and the July figure of 65.4 (revised down from 65.9). (Event B on the chart.)

EUR/USD for 2012-08-28

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

2 Responses to “Hopes for Spain Push EUR/USD Higher”

  1. Jeff

    Spain will for sure get a bailout, but who knows what that will do to the markets. There is no way of telling anymore. I would think that them getting a bailout is such a sure thing that any uncertainty of it is expressed in more selling…

    So when the word comes in, that money should flow back into europe…Who knows?

    Reply

    admin Reply:

    Some part of the traders believes that Grexit would be a better outcome for the euro.

    Reply

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