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US Data Surprise Positively for a Change, EUR/USD Drops

February 26, 2014 by

US economic fundamentals provided a pleasant surprise for a change today, following a string of worse-than-expected reports, as new home sales grew instead of falling. This made EUR/USD drop, and the downward momentum was also supported by the general risk aversion on the Forex market. Traders felt less willing to risk as China’s attempts to prevent further gains of the yuan bode ill for the global economy, while the political turmoil in Ukraine spoils the investors’ mood too.

New home sales were at the seasonally adjusted annual rate of 468k in January up from the revised December rate of 427k (was at 414k before the revision). It was a pleasant surprise to traders who have expected a drop to 406k. (Event A on the chart.)

US crude oil inventories increased only marginally by 0.1 million barrels last week and are in the upper half of the average range for this time of year. They were expected to grow at about the same rate as in the previous week (1.0 million). Total motor gasoline inventories decreased by 2.8 million barrels, but are in the upper half of the average range. (Event B on the chart.)

EUR/USD-2014-02-26

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