EUR/USD continued to demonstrate admirable performance, rallying for the third straight session and reaching the highest level in a month. The dollar remains soft (though it was attempting to rebound versus some currencies) on speculations that the Federal Reserve will maintain quantitative easing in the near term. Today’s data supported such view, suggesting that the US economy has some problems, as manufacturing unexpectedly declined this month.
Richmond Fed manufacturing index fell from 8 in June to -11 in July. The reading below 0 indicates worsening conditions. It was a frustrating surprise to economists who expected the gauge to stay
Yesterday, a report of existing home sales was released, showing a drop to the seasonally adjusted annual rate of 5.08 million in June from the downwardly revised 5.14 million in May. The forecast of 5.27 million was way of the mark. (Not show on the chart.)
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