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Here is a quick look at the fundamentals that effects the EURUSD trade yesterday, needless to say that the FOMC minutes are the over shadowing event from Wednesday evening that continues to color markets and prices. Today should be a fairly light day as the summer vacation draws to a close and traders will return to their desks on Monday. The main event today will be the US durable goods due at the end of the trading day. It will also provide one of the final puzzle pieces needed to the Feds and for traders to interpret FOMC actions come Jackson Hole. The EURUSD is expected to remain in a tight range around the 1.2550-65 level unless something unexpected happens with Spain or the ECB
US Unemployment Claims increased by 6,000 to 372,000 for the week ending on 17th August from previous rise of 366,000 in prior week. Flash Manufacturing Purchasing Managers' Index (PMI) increased by 0.5 points to 51.9-mark in August as against a rise of 51.4-level in July. New Home Sales increased by 13,000 to 372,000 in July as compared to previous rise of 359,000 a month ago. House Price Index (HPI) rose to 0.7 percent in June with respect to earlier rise of 0.6 percent in prior month.
The US Dollar Index (DX) swung between gains and losses and finally settled with depreciation of 0.2 percent yesterday. Weakness was witnessed in the early part of the trade due to optimism that central bankers around the globe might adopt stimulus measures to boost the economy. However, weak economic data from the US along with concerns that European leaders are not making sufficient progress to solve the Euro zone debt crisis led to rise in the risk aversion in the global markets in the later part of the trade and recovered earlier losses of the DX.
US equities declined taking negative cues that European leaders are not progressing well in solving the Euro zone debt crisis. The currency touched an intra-day low of 81.22 and closed at 81.36 on Thursday.
Euro appreciated around 0.3 percent yesterday on the back of weakness in the DX along with mixed data from the Euro zone region. However, sharp gains were capped towards the end due to concerns that European leaders are not taking substantial steps to resolve the Euro zone debt crisis. It touched an intraday high of 1.2589 and closed at 1.2526 on Thursday.
The German Finance minister commented on Greece and indicated that more time may end up in increased bailout fund and further weakened the upbeat sentiments.
Today, the Greek Prime Minister is scheduled to visit the German Chancellor and hopes may remain high regarding the same. However, Germany’s Merkel may remain under obligation before the troika report and may disappoint market sentiments.
European Consumer Confidence further declined to -25-level in July from previous decline of -22-mark a month ago.
German Final Gross Domestic Product (GDP) remained unchanged at 0.3 percent in Q2 of 2012. French Flash Manufacturing Purchasing Managers' Index (PMI) increased by 2.8 points to 46.2-mark in current month as against a rise of 43.4-level in July.
German Flash Manufacturing PMI increased by 2.1 points to 45.1-level in current month as compared to previous mark of 43 in July. German Flash Services PMI declined by 2 points to 48.3-mark in August with respect to earlier level of 50.3 in last month.
European Flash Manufacturing PMI increased by 1.3 points to 45.3-level in current month as against a rise of 44-mark in earlier month.