EUR/USD was slowly moving down today, but sharply bounced, erasing losses, after the durable goods orders report came out significantly worse than was expected. The release followed last week’s housing data that was not good either. Previously, the dollar was supported by anticipation of quantitative easing tampering in September, but prospects for stimulus reduction look less probable after the recent negative reports.
Durable goods orders slumped 7.3% in July, a way more than analysts have predicted (3.0%). The June increase was revised down from 4.2% to 3.9%. Core orders slid 0.6%, while forecasters have promised that they would rise by the same rate. (Event A on the chart.)
On Friday, a report on new home sales was released, showing a drop from 455k in June (revised down from 497k) to 394k in July. The data was very poorly received by market participants as they were expecting an increase to 487k. (Not shown on the chart.)
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