EUR/USD Drops on Policy Outlook, Rebounds

EUR/USD dropped today, following yesterday’s gains, as European policy makers were talking about possible addition of economic stimulus. Meanwhile, US policy makers were trying to talk down interest rate hike expectations caused by the last week’s policy statement. Today’s data from the United States was mostly disappointing with the exception of consumer confidence that rose much more than was expected.
S&P/Case-Shiller home price index rose 13.2% in January, a bit slower than in December (13.4%) and than forecasters have predicted (13.3%). The index fell a little by 0.08% on a monthly basis. (Event A on the chart.)
Richmond Fed manufacturing index fell from -6 in February to -7 in March, frustrating market participants who have expected an increase to -1. (Event B on the chart.)
Consumer confidence jumped from 78.3 in February to 82.3 in March, while analysts have expected just a meager increase to 78.7. (Event B on the chart.)
New home sales fell to the seasonally adjusted annual rate of 440k in February, missing the forecast of 447k. Moreover, the previous month’s reading was revised down from 468k to 455k. (Event B on the chart.)


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