EUR/USD Drops on Consumer Confidence & Fed Outlook

US consumer confidence improved this month, and this allowed the dollar to gain on the euro and ignore other recent poor data. The Federal Reserve started its two-day policy meeting today and will announce its decision tomorrow. Market participants expect the Fed to continue stimulus reduction and are also pricing in an interest rate hike in a relatively near future, meaning that the monetary policy outlook is also supporting for the US currency.
S&P/Case-Shiller home price index rose 9.3% in May, year-on-year, slower than was forecast (9.8%). The May’s growth was also below the April’s 10.8%. Month-on-month, the index grew 1.1%. (Event A on the chart.)
Consumer confidence climbed from 86.4 in June (revised up from 85.2) to 90.9 in July, while analysts expected it to fall to 85.5. (Event B on the chart)
On Friday (July 25), a report on durable goods orders was released, showing an increase by 0.7% in July. This is compared to the consensus forecast of 0.4% and the previous month’s -0.9% change. (Not shown on the chart)
Yesterday, a report on pending home sales was released, demonstrating a drop by 1.1% in June. The reading was worse than the expected decrease by 0.2% and the May increase of 6.0%. (Not shown on the chart)


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