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US Services PMI Drops to Record Low, EUR/USD Gains

March 24, 2020 by

EUR/USD rose today, gaining for the third consecutive trading session, though it has trimmed its gains by now. The biggest news lately was yesterday’s announcement of unlimited quantitative easing from the Federal Reserve. As for US macroeconomic data, Markit releases showed deterioration of the US economy, with the services index falling to the record low. The manufacturing index was better than expected, though, and other reports were surprisingly good.

Markit released flash estimates for manufacturing and services PMIs. Manufacturing PMI dropped from 50.7 in February to 49.2 in March — the lowest level in more than a decade. Nevertheless, it was above the median forecast of 45.1. Services PMI plunged from 49.4 to 39.1 — the lowest level on the record. It was below the average forecast of 44.1. (Event A on the chart.)

Richmond Fed manufacturing index rose from -2 in February to 2 in March. That was a far better reading that a drop to -10 predicted by experts. (Event B on the chart.)

New home sales were at a seasonally adjusted annual rate of 765k in February, down from the revised January rate of 800k (764k before the revision). Still, the actual value was above the forecast figure of 750k. (Event B on the chart.)

On Friday, a report on existing home sales was released, showing an increase to a seasonally-adjusted annual rate of 5.77 million in February from 5.42 million in January (revised down from 5.46 million). Analysts had predicted a smaller increase to 5.50 million. (Not shown on the chart.)

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