The euro strengthened over the dollar by 0.23 cents yesterday to close at 1.2741. Early in the session rising stocks in both Europe and the US fueled risk appetite and investors bought the euro. Later in the day however, new US Home Sales figures were announced and showed that there were 309,000 fewer sales in January than December, a fall of 10.2%. This reversed the performance of US stocks and the dollar pared it's gains as risk aversion returned. This was by no means the only major announcement yesterday though, the amount of Continuing Jobless Claims in the US rose to 5.112 million, Durable Goods Orders fell by 5.2% in January and 667,000 new Americans registered for unemployment benefits. However on all this negative news, the dollar failed to be weakened significantly which shows that exchange rates are not been derived off fundamentals.
In today's trading the dollar has strengthened back over the euro ahead of the announcement of Consumer Price Index data and Unemployment Rate data in the eurozone. In the US, GDP Annualized and Real Personal Consumption Expenditure are both announced as well as the Chicago Purchasing Managers' Index and the Reuters/Michigan Consumer Sentiment Index.
EURUSD: 1 week chart. Click on graph to enlarge.
EURUSD: 1 week chart. Click on graph to enlarge.
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