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US Data Disappoints – Curbs Dollar Rally

US industrial production fell by 0.5%, significantly worse than a small dip of 0.1% that was expected. This joins other weak figures reported earlier.

The dollar is now retracing some of the big gains made earlier in the day, as a Fed “tapering” seems a bit more distant than beforehand. The weak data also provides dollar bulls to take profits.

EUR/USD is now struggling with the 1.2880 line it lost earlier. The pair fell as low as 1.2842 after euro-zone GDP numbers disappointed. USD/JPY is around 102.13 after already climbing above 102.70 earlier. Technical analysis: USD/JPY Advances Bullish Trend but Due for Correction.

The capacity utilization rate dropped from 78.5 to 77.8%, short of 77.4% that was predicted.

Earlier, US indicators disappointed: The Empire State Manufacturing Index dropped to -1.4, lower than +3.6 that was expected and 3.1 last time. The negative number is certainly worrying.

Also the Producer Price Index fell by 0.7%, showing that inflation remains low. A drop of 0.7% was predicted. Core PPI rose by 0.1%, exactly as expected.

AUD/USD also managed to recover, regaining the 0.99 level.  Some expect AUD/USD to fall as low as 0.60.

Yohay Elam

Yohay Elam

Yohay Elam: Founder, Writer and Editor I have been into forex trading for over 5 years, and I share the experience that I have and the knowledge that I've accumulated. After taking a short course about forex. Like many forex traders, I've earned a significant share of my knowledge the hard way. Macroeconomics, the impact of news on the ever-moving currency markets and trading psychology have always fascinated me. Before founding Forex Crunch, I've worked as a programmer in various hi-tech companies. I have a B. Sc. in Computer Science from Ben Gurion University. Given this background, forex software has a relatively bigger share in the posts.