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Euro in New York: Any Movement is Good Movement

Posted by Joseph Trevisani on Jul 24, 2014 4:53:00 PM

The euro opened in New York (8:30 am) at 1.3474 after a good recovery from the European low of 1.3438. Markit's better than forecast German PMI scores at 3:30 am NY, (manufacturing 52.9 vs. 51.9, services 56.6 vs. 54.5, composite 55.9 vs. 53.8) was the prime mover. The euro soared from 1.3439 to 1.3475 within 30 minutes.

French PMIs, issued 30 minutes earlier at 3:00 am split, with services and composite stronger than predicted but manufacturing weaker (manufacturing 47.6 vs. 48.0, services 50.4 vs. 48.2, composite 49.4 vs. 48.3) and had little trading effect. Eurozone PMIs at 4:00 am were also improved and led to the euro top a few minutes later at 1.3485. 

The best  US weekly jobless claims number in eight years (284,000 vs 307,000) gave the euro a brief drop to 1.3466 followed by a burst to 1.3473. The Labor Department noted that claims can be volatile in the latter part of the summer as automakers retool factories. 

Treasury yields recovered from yesterday's sell off. The 10-year closed 4 basis points higher at 2.50 percent. That seemed to matter more to NY traders than the June new home sales at 10:00 am,  much poorer than forecast losing 8.1% (406,000 vs. 45,000) and the euro dipped to 1.3458 just before their release.

Two failed attempts to break higher, one  in the morning ending at 1.3474, and one in the afternoon ending at 1,3472 kept some active interest, but the post-London range was a mere 11 points, 1.3461 to 1.3472. 

Friday's focus will be the German July IFO Index at  4:00 am NY. 

The euro closed at 1.3464. 


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Chart: Bloomberg



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