EUR/USD was unable to maintain yesterday’s rally today as US jobless claims unexpectedly fell. The political disagreement about the US debt ceiling continued to affect the dollar, but today in a positive way, driving traders to the safety of the US currency. The greenback outperformed the euro even as the US housing market showed signs of weakness, which was rather surprising considering that housing was the strongest sector in the US economy in the recent times.
Initial jobless claims were down from 310k to 305k last week instead of rising to 319k as was predicted. (Event A on the chart.)
US GDP expanded 2.5% in the second quarter of 2013 in the final estimate, unrevised from the preliminary reading, following the 1.1% expansion in the first quarter. Analysts have counted on a revision to 2.7%. (Event A on the chart.)
Pending home sales dropped 1.6% in August from July, when the drop was at 1.4%. Traders have hoped for a smaller decrease by 0.9%. The report explained the decline by “tight inventory conditions, higher interest rates, rising home prices and continuing restrictive mortgage credit”. (Event B on the chart.)
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