EUR/USD Continues to Rise

EUR/USD extended its rally to the levels last seen more than a year ago. Such fast and strong rally causes concern that the strength of the euro may be more disastrous to the European economy than the sovereign debt crisis. The US economic data was encouraging today, especially the unexpected surge of the construction spending. EUR/USD rallied to 1.4894, the highest level since November 2009.
ISM PMI was at 60.4% in April, compared to 61.2% in March. Despite this little drop, the index was better than forecasts (59.9%) and showed an expansion of manufacturing for 21st consecutive month. (Event A on the chart.)
Construction spending grew 1.4% in March, much better compared to the market expectations of 0.4% and was even much better compared to the February decline by 2.4%. (Event A on the chart.)

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