Positive US Reports Not Good for EUR/USD

EUR/USD dropped today amid speculations that the Federal Reserve will reduce its quantitative easing program as the US economy recovers. Today’s reports supported such outlook, showing an improvement of economic conditions and adding incentive for the Fed to trim stimulus. The Dollar Index climbed, pushing other currencies down.
S&P/Case-Shiller home price index advanced from 150.03 in February to 151.71 in March. The annual increase was at 10.9%, compared to the analysts’ expectations of 10.2% and the previous change of 9.4%. (Event A on the chart.)
Consumer confidence jumped from 69.0 (revised up from 68.1) in April to 76.2 in May, beating market expectations of 70.7. (Event B on the chart.)
Richmond Fed manufacturing index improved from -6 in April to -2 in May. The gauge was still below the forecast figure of 2 despite the improvement. The report said that ” manufacturers in May were more optimistic about their future business prospects”. (Event B on the chart.)
On Friday (May 24), a report on durable goods orders was released, showing an increase of 1.3% April, following the 1.5% drop in March. The median forecast pointed at 0.6% growth. (Not shown on the chart.)


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