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The highly regarded Philly Fed Manufacturing Index nosedived for a second week in a row: after turning negative last month to -5.8 points, it now fell deeper in negative ground, to -16.6 points.

Also existing home sales slid. The reaction in the markets is risk averse: the dollar is on the rise. This is not a QE3 play.

EUR/USD extended its fall that began after the release of the jobless claims, which also disappointed. It now trades under 1.2624 – lower than the levels it traded in after the FOMC decision.

GBP/USD is also falling, but still holding above 1.5650 – for the third time in around 30 hours. Will it break this time?

The Philly Index released early: the number is for the month of June, and is somewhat correlated with other manufacturing indices. Negative numbers reflect worsening conditions.

Existing home sales squeezed from 4.62 to 4.55 million. An annual pace of 4.58 million was expected. Earlier in the week, housing figures were better, especially in building permits.

Also pessimism about Europe adds to the weakness of risk currencies.