European Central Bank Helps EUR/USD Advance

EUR/USD advanced today as the European Central Bank prepares to distribute unlimited three-year funds among European banks. The currency pair was down yesterday as Group of Twenty refused to help Europe and Standard & Poor’s reduced Greece’s credit rating to selective default. Economic data from the United State wasn’t particularly good today. Consumer sentiment improved and manufacturing continued to expand, but durable goods orders and the S&P/Case-Shiller home price index are still demonstrating negative tendencies.
Durable goods orders was down 4.0% in January, according to the advance report. That’s compared to the December increase of 3.2% (revised up from 3.0%) and analysts’ expectation of a 0.8% drop. (Event A on the chart.)
S&P/Case-Shiller home price index fell from 137.31 in November to 136.63 in December. The index dropped 4.0% on an annual basis. The actual change was in line with forecast of a 3.6% decrease and near the previous figure of -3.9% (revised from -3.7%). (Event B on the chart.)
Richmond Fed manufacturing index was at 20 on February, showing that manufacturing expanded for the third straight month. The forecast value of 11 was closer to the January reading of 12. (Event C on the chart.)
Consumer confidence was at 70.8 in February, demonstrating a bigger increase than the predicted rise to 63.1 from the January figure of 61.5. (Event C on the chart.)
Yesterday, a report on pending home sales was released, showing an increase by 2.0% in January from December, an improvement from the December reading of -1.9% (revised from -3.5%) and better than the median forecast of 1.1%. (Not shown on the chart.)

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