EUR/USD Maintains Rally as US Data Continues to Disappoint

EUR/USD advanced today, maintaining the rally that has started on Friday. The euro was buoyed by a positive result of the Italian debt auction, while the dollar continued to be under pressure from worse-than-expected fundamentals. The data was not exactly bad (and the housing report was fairly good), but it looks like traders pay more attention to the bad part of news for the United States, overlooking the good part.
Personal income and spending rose in March. Spending grew 0.2%, matching forecasts exactly, after increasing 0.7% in February. Income trailed forecasts, growing at the same 0.2% rate, which was below the expected 0.4%. The February increase was at 1.1%.
Pending home sales rose 1.5% in March, beating the forecast of 1.1%. The report was not completely good as it said that “contract activity in recent months shows only modest movement”, but it explained that the the slack of activity was “not from a pause in demand but because of limited supply”. What was even worse, the February reading was revised negatively from -0.4% to -1.0%.


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