Daily Economic Commentary: United States

Trading Discussion News and Economy
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The dollar didn’t have the most rockin’ day on the charts, but it still managed to score wins against most of its counterparts. Only the pound was able to nudge the its advances with GBP/USD closing 87 pips above its opening price at 1.6020.

It would seem that investors were already feeling jittery yesterday ahead of Spain’s big bond auction which is scheduled today. Consequently, this highlighted the dollar’s safe haven appeal. However, I think better-than-expected economic reports from the U.S. could’ve helped the currency get more pips. Too bad our forex calendar was blank for reports from the U.S. yesterday.

But don’t worry! If you’re feeling bullish for the dollar today, there are a few top-tier reports on tap that you can sink your teeth into. Just cross your fingers for the actual figures to come in higher than their respective forecasts!

We start things off at 12:30 pm GMT when the initial jobless claims report is released. It is anticipated to show that 370,000 people filed for unemployment benefits.

Then at 2:00 pm GMT, data on existing home sales for March is eyed to come in at 4.62 million. Along with that, the Philly Fed Manufacturing index will also be released. Only a minor pullback to 12.1 is anticipated for April to follow the 12.5 reading for March.

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Despite the amount of high profile economic events yesterday, the Greenback was unable to pick a direction. It simply traded within tight ranges versus other major currencies, with the U.S. dollar index ending the day barely changed at the 80.03 level.

Data released inthe U.S. all failed to meet the market’s expectations. The weekly initial jobless claims showed that 386,000 people claimed for unemployment insurance last week, higher than the 370,000 figure initially expected.

Meanwhile, the existing home sales report came in at 4.48 million, lower than the 4.62 million forecast. Lastly, the Philly Fed manufacturing index printed a reading of 8.5, weaker than the 12.1 consensus.

No red flags on the U.S. forex calendar today, so we’ll likely see the Greenback move sideways just like yesterday against other major currencies.

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That is NOT how you wanna end the week! The doolar took a beating across the charts, as lost out against the euro, pound, and the comdolls. Will the dollar make a comeback or will the sell-off continue?

It appears that we’re seeing risk sentiment pickup in the forex markets, as the other higher yielding currencies benefitted from good news across the globe. Successful bond auctions, less dovish central bank statements and strong equity markets all spelled gloom and doom for the scrilla.

No data coming out from the U.S. today, so we might see major currency pairs stay within range, albeit with a slight bias to the upside.

Watch out later in the middle of the week, as we’ve got some high impact reports heading our way. The most important of those will probably be the FOMC statement on Wednesday, as this will give us some clues as to what direction the Fed is leaning in terms of its monetary policy.

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The Greenback found itself significantly higher yesterday, thanks to the rising political uncertainty and disappointing economic data from Europe yesterday. The U.S. dollar index, which started the week at 79.67, had risen as high as 80.11 before settling at 79.85 by the end of the U.S. trading session.

Risk sentiment took a surprise hit yesterday as one of the coalition partners in the Netherlands withdrew due to disagreement over the 2013 budget. This was taken extremely negatively by the market, as the political stalemate could affect the country’s sovereign debt rating.

Whether this bout of risk aversion will continue or not will depend greatly on the results of the upcoming economic data from the U.S. At 2:00 pm GMT, the CB consumer confidence survey and the new home sales report will be published.

The CB consumer confidence survey is slated to print a reading of 69.9 from last month’s 70.2 while the new home sales is expected to show an annualized 321,000 in sales from the previous month’s 313,000. Let’s see how price action pans out once these reports come out later.

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The Greenback took hits against most of its major counterparts yesterday after the U.S. economic reports came in much weaker than many had expected. EUR/USD rose by 35 pips to 1.3187, while USD/CHF fell by 28 pips to .9111.

The S&P Case-Schiller started the dollar bears’ party yesterday when it printed another 3.5% decline in home prices for the month of February. Remember that the Fed and the markets are looking closely at housing and manufacturing data for economic recovery.

So when the new home sales clocked in at 328,000 in March against the upwardly revised 351,000 figure in February, investors failed to give the dollar some lovin’. It didn’t even help that prices of homes with mortgages backed by Freddie Mac and Fannie Mae rose by 0.3% in February.

It doesn’t end there! The CB consumer confidence data came in at 69.2 in March, which is lower than the 69.5 reading we saw in February. The Richmond manufacturing index was the only better-than-expected reading with 14 against its previous reading of 7, but the markets largely shrugged that off too.

Today all eyes will be on the Fed as they give their FOMC statement at 5:30 pm GMT. While some market players are expecting the Fed to signal a QE3, some are saying that they could actually end up confusing investors with their press conference and economic projections reports following the statement at 7:00 pm GMT.

If you want to trade U.S. reports though, then you can also wait for the durable goods orders data coming up at 1:30 pm GMT. The core figure is expected to print higher than its previous figure, but make sure you keep an eye out for any surprises!

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Way to burn the Greenback, Big Ben! Thanks to the Fed head’s dovish remarks yesterday, the dollar continued to extend its losses against most of its counterparts. EUR/USD closed 33 pips higher at 1.3220 while GBP/USD rallied from its intraday low of 1.6081 to close at 1.6171.

The dollar was only able to win against the yen as USD/JPY ended the day 4 pips higher from its opening price at 81.34.

The FOMC statement left traders dazed and confused about what to do with the dollar. The upward revision to inflation and lowered unemployment forecasts gave them a couple of reasons to be bullish for the currency. However, Fed Chairman Ben Bernanke’s remarks about how the central bank is ready to take on more actions to ensure the recovery of the U.S. economy hinted that he still has not given up on QE3. Consequently, this might have convinced some investors to sell the dollar.

In the end, most market junkies have concluded that the fragile state of the U.S. economy and the jittery situation of Europe’s debt crisis have left the Fed with very few options and unable to make any big decisions on monetary policy.

Some of the negative vibes from yesterday’s statement would still probably haunt the dollar in today’s trading. And I have a feeling that they could be exaggerated if U.S. economic reports fall short of expectations as they would affirm Bernanke’s plans for QE3 just like yesterday’s reports.

Durable goods for March printed a much bigger decline of 4.2% that what analysts predicted at 1.5%. Excluding volatile items, the core durable goods reading also failed to meet expectations when it came in at -1.1% while it was anticipated at 0.6%.

So be sure you don’t miss the reports we have on tap today, ayt?

At 12:30 pm GMT, the jobless initial claims for last week is anticipated to have reached 374,000. Then at 2:00 pm GMT, data on pending home sales for March will be released and analysts have predicted a 1.2% rise for the month.

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Even though the Fed left the door open for QE3 in its FOMC statement on Wednesday, the dollar was able to limit its losses against its major counterparts. It lost 18 pips to the euro and 22 pips to the pound, while giving up 39 pips to the yen. Will today’s GDP report help it recover?

We got a bit of bad news from yesterday’s unemployment claims report, as it failed to meet market expectations. Traders were hoping to see initial jobless claims decline from 389,000 to 374,000, but instead, they were greeted by a worse-than-expected figure of 388,000. Drats! Because this marks the third straight week that claims stayed above 385,000, many are starting to worry that next week’s non-farm payrolls will show a weak figure as well.

On a more positive note, the pending home sales report was upbeat for March, as sales were up 4.1% instead of just 1.2% (as many had forecasted). But sadly, this didn’t do much to stoke demand for the dollar. It looks like it’ll take more than a month of data to convince investors that the lagging housing market is out of the dumps!

Up ahead, we have a potential market-mover in the advance GDP report, scheduled for release at 12:30 pm GMT. Forecasts have the economy expanding by 2.6% in Q1 2012, following the 3.0% growth in Q4 2012. A positive reading from this report could help reverse some of the recent bearishness for the dollar, so don’t miss it!

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Did the Greenback just anger the Incredible Hulk? Then why, oh why, did it get heavily clobbered last Friday? EUR/USD jumped to its three-week high of 1.3271 while GBP/USD carried on with its rally above the 1.6200 handle. Take a look at the upcoming events to figure out if the U.S. dollar will get smashed again this week.

Weaker than expected U.S. Q1 2012 GDP released last Friday reminded traders that the Fed could be closer to implementing another round of quantitative easing. The advanced reading came in at 2.2%, much lower than the 2.6% consensus and a few percentage points below the previous reading of 3.0%. As Forex Gump mentioned in his FOMC review article, Big Ben reminded the markets that the Fed was “prepared to do more as needed to make sure the recovery continues” and that bond purchasing “is still very much on the table.”

This week, the U.S. dollar could be rocked by another top-tier release in the form of the non-farm payrolls report. After all, the jobs situation is one of the factors that could influence the Fed’s decision on further easing. For the month of April, jobs growth is expected to be slightly stronger than that of March, with the employment change figure projected to come in at 176K and the unemployment rate to hold steady at 8.2%. Make sure you mark your calendars for the release on Friday because a weaker than expected figure could do a number on the Greenback again!

But before that, the U.S. is also set to print a few medium-tier reports throughout the entire week. Today, the core PCE price index and personal spending figures are set for release at 1:30 pm GMT. Bear in mind that the core PCE price index is rumored to be the Fed’s preferred measure of inflation so y’all better keep tabs on that as well! That report could show a 0.2% uptick for March while personal spending could print a 0.4% increase.

Also due today is the Chicago PMI, which could dip from 62.2 to 60.9 in April, reflecting a weaker expansion in the manufacturing sector. Keep an eye out for that at 2:45 pm GMT.

Wednesday has the ADP employment change report on tap and we all know how this usually rocks the markets prior to the actual NFP release. Then Thursday has the usual weekly jobless claims report along with the ISM non-manufacturing PMI, which could show a slight downturn from 56.0 to 55.5 in April.

Don’t forget that there are also some market-moving Chinese reports due this week so make sure you drop by my daily economic commentary for Australia and review the lesson on Trading the News if you plan to grab some pips off these economic releases!

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Is that a ranging market I see? Ah, why yes it is! Due to the absence of high impact economic reports, the safe haven Greenback found itself simply trading within tight horizontal channels versus other major currencies. EUR/USD, for instance, closed yesterday’s trading session at 1.3237, just 3 pips higher from its opening price that day.

Mid-tier economic reports were published yesterday; namely, the core PCE price index, the personal spending report, and the Chicago Purchasing Managers’ Index.

The core PCE came in as expected with a 0.2% gain. Meanwhile, both the personal spending report and Chicago PMI failed to meet forecast. Personal spending increased only 0.3% and not 0.4% as initially predicted. The Chicago PMI showed a reading of 56.2, lower than last month’s 62.2 and the 60.9 forecast.

Today, there’s only one red flag on the U.S. forex calendar. At 2:00 pm GMT, the ISM manufacturing PMI will be released. It is anticipated to print a reading of 53.0, which is slightly higher than last month’s 53.4. Based on the last few releases, better-than-expected results trigger a rally in EUR/USD while weaker-than-expected results lead to a sell-off.

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Better than expected U.S. economic data propped the U.S. dollar up against its major counterparts in yesterday’s trading. EUR/USD fell short of its rally to 1.3300 and dipped to a low of 1.3204 while USD/JPY closed 17 pips above the 80.00 handle. Can the Greenback hold on to its gains today?

The U.S. printed a strong ISM manufacturing PMI for April as the reading climbed from 53.4 to 54.8 instead of dropping to 53.0. This indicates that the manufacturing industry is still expanding strongly and that it grew at a faster pace in April.

Aside from that, FOMC member Williams gave a speech yesterday and sounded more optimistic than usual. He pointed out that there were several bright spots in the U.S. economy, particularly in the manufacturing industry, even though the housing sector is still a bit wobbly. He also mentioned that QE3 might be a possibility if employment conditions don’t improve.

Today, the U.S. is set to release the ADP non-farm employment change figure and show a 178K increase in private payrolls. This would be slightly less than the 209K reading seen for March. Still, another better than expected result could boost the U.S. dollar as fundamentals seem to be driving the currency these days. Keep an eye out for the actual release at 12:15 pm GMT.

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Surprisingly enough, the dollar gained ground against most of its counterparts even though yesterday’s ADP report was a total bust. As a matter of fact, it gained 84 pips against the euro to force EUR/USD to finally break out of consolidation. Talk about defying gravity!

Weak European data propped the dollar up against its major counterparts and helped the markets overlook the fact that the U.S. is dealing with problems of its own. What kind of problems, you ask? Labor market problems, what else?!

The ADP non-farm employment change report fell waaay short of forecasts as the month of April saw an increase of just 119,000 jobs, instead of the 178,000 surge that many had expected. This report is particularly troubling because it basically tells the same story as the recent rise in unemployment claims - that is, the April NFP could turn out to be a disaster!

In any case, we’ll get a clearer picture of the whole situation later today as the Challenger Job Cuts report is due at 11:30 am GMT. The last time this report came out, it showed a decrease of 8.8% in the number of job cuts announced by employers. A strongly positive figure would mean that companies shed a lot of jobs last month, and this could play into Friday’s NFP report.

Meanwhile, the ISM non-manufacturing PMI is due at 2:00 pm GMT, and my homeboys say it’s likely that we’ll see the index slip from 56.0 to 55.5. It’ll be very interesting to see if the services sector added jobs last month, so be sure to catch the details of this report as well.

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Traders played tug-o-pips at the release of the ECB’s statement and mixed reports from the U.S., so the Greenback ended the day unchanged against most of its major counterparts. GBP/USD edged lower though, ending the day 19 pips lower at 1.6181.

Just when we thought that the Greenback is going to make a killing on continued risk aversion in markets, the ECB surprised traders with a less dovish-than-expected interest rate announcement yesterday. If you’re interested in the details, you can read all about it in my EUR writeup.

It also didn’t help the Greenback that the U.S. pumped out mixed economic reports yesterday. The Challenger job report showed an 11.2% increase in announced job cuts in April, which is a lot worse than the -8.8% figure we saw in March. Good thing that initial claims report printed at 365K when markets were expecting 381K claimants.

The good news stops at initial jobless claims though. Productivity in the non-farm sector dropped by 0.5% in the first quarter after rising by 1.2% in Q4 2011. Then, the ISM non-manufacturing PMI clocked in a 53.5 reading in April, down from the 56.0 reading in March.

Let’s see if we can get a clear direction on the dollar today when the U.S. releases its highly anticipated NFP report at 1:30 pm GMT. Despite indications of a weakening job market, many of my forex homies still bet that the NFP will print higher than March’s 120,000 figure. Meanwhile, the unemployment rate is expected to stay at 8.2%.

As Forex Gump mentioned in his NFP article, the NFP and unemployment reports usually inspire volatility in the markets, so you better be at the edge of your seats when they are released!

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Risk aversion is back in style, baby! The U.S. NFP report gave a very poor showing last Friday, leading traders to ditch higher-yielding currencies and buy up safe haven assets such as the dollar. For instance, EUR/USD ended the day 64 pips below its opening price at 1.3089. And to start the week off, the pair gapped down by another 54 pips! Does this mean the dollar will continue rising?

That might very well be the case! The dollar rally can be seen on practically all charts except USD/JPY, and dollar pairs have managed to break through key levels over the weekend.

Of course, y’all probably know by now that you have the NFP report to thank for all this volatility. The report really did a number on the charts by printing a lame increase in jobs of just 115,000, instead of the 173,000 that was predicted. Meanwhile, the unemployment rate slipped from 8.2% to 8.1%, as a handful of Average Joes ended their search for jobs and left the workforce. Yowza!

The only silver lining was the fact that March payrolls were revised up from 120,000 to 154,000.

Some investors believe that these weak employment figures increase the likelihood of QE3 as it basically confirms the Fed’s fears - that the labor market’s pace of growth isn’t sustainable! The Fed has said in the past that the labor market will be one of its main considerations in determining monetary policy.

Remember, even though it revised its unemployment rate forecasts down, it didn’t rule out the possibility of more stimulus. Hmm… I can’t wait to hear what them policymakers have to say about all of this now!

Contrary to what we saw last week, we won’t be getting much data from the U.S. this week. As a matter of fact, the ones worth catching won’t be available 'til Thursday, when we have trade balance data, the unemployment claims report, and Ben Bernanke’s speech on tap. On Friday, we’ll cap off the week with PPI figures, and the preliminary University of Michigan consumer sentiment report.

But until these heavy hitters come out, risk sentiment will probably continue to dictate price action on the charts, so don’t be surprised if the dollar holds on to or extends its gains!

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Whoa, slow down there buddy! Just when we thought that the dollar was gonna go all Black Mamba on the markets, it came up short like Lebron in the 4[SUP]th[/SUP] quarter! After zooming higher to start the day, the Greenback stumbled later on as risk appetite improved. By the end of the day, the dollar was lagging behind the euro, pound, Swiss franc, and Canadian dollar.

It appears that risk sentiment is the name of the game right now, as the dollar has been bobbing its head to the flows of risk-taking. For the meantime, I expect this to be the dominating market theme, so stay on your toes kiddos and make sure you catch that beat!

For today, no hardcore data is lined up but do keep an ear out for my homie Jeffrey Lacker’s speech at 11:15 pm GMT. Mr. Lacker is the head honcho of the Federal Reserve Bank of Richmond and is part of the FOMC. He’ll be speaking about the state of the labor market and may possibly drop some hints as to what direction he’s leaning towards in terms of monetary policy.

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The U.S. dollar continued to take advantage of risk aversion in yesterday’s trading while higher-yielding currencies lost ground. EUR/USD tested the 1.3000 handle again and dipped to a low of 1.2982 while GBP/USD struggled to hold on to the 1.6150 minor psychological level.

U.S. economic data came in weaker than expected as the IDB/TIPP economic optimism index stayed below the 50.0 mark and dropped from 49.3 to 48.5 in May. Components of the survey revealed that the drop was spurred by a downbeat six-month economic outlook, personal financial outlook, and lack of confidence in the Fed’s monetary policies.

Today, the U.S. is set to release its crude oil inventories at 2:30 pm GMT. Later on, FOMC member Pianalto is set to give his speech on leadership in Lexington and he might drop hints on where he stands when it comes to monetary policy. Stay tuned for that at 2:45 pm GMT.

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Chalk up another victory for the scilla baby! With the beat of risk aversion flowing throughout the market, the dollar bulls fist-pumped their way throughout the day. EUR/USD finally closed below the 1.3000 handle, while AUD/USD set a new year-to-date low at 1.0020.

FOMC member Pianalto came out with a rather flat tone yesterday, saying that while the economy’s recovery was at a moderate pace, more was needed to bring down the unemployment rate to 6.0%. With the lack of any mention of QE3, his comments barely caused a ripple in the markets.

With no other hard data coming out yesterday, the spotlight shined brightly on the euro zone. Unfortunately, it appears that the threat of a Grexit is becoming more and more real as no coalition government has been formed. As long as this remains an issue, don’t be surprised to the see the Greenback roll all over the other major currencies.

Today we may be in for some more fireworks, as we’ve got a couple of economic reports heading our way.
First up, we’ve got trade balance and unemployment claims figures coming in at 12:30 am GMT. Expectations are that we’ll see a trade deficit of 49.8 billion USD, which would mark a slight increase from last month’s deficit of 46.0 billion USD.

Meanwhile, unemployment claims are seen to jump up slightly from last week’s figure of 365,000 to 371,000. Seeing as how the dismal figures from the latest NFP report helped trigger widespread risk aversion, if we see tonight’s claims data print higher-than-expected, it may trigger another round of dollar-buying as traders unload riskier assets.

Later on at 1:30 am GMT, Fed top gun Ben Bernanke will be speaking about the state of bank lending at a convention in Chicago. While this is a public event and he won’t be speaking in behalf of the Fed, who knows what he might say! So make sure you pay attention and be aware when he’s speaking!

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Uh oh! Is the dollar rally already running out of steam? After its stellar performance against the euro earlier on in the week, the dollar only clocked in a measly 5-pip gain in yesterday’s trading. In fact, a doji formed on the daily chart of EUR/USD when it closed at 1.2944!

According to some analysts, investors took a break from worrying about the political drama in Greece and shifted their attention to China.

Yesterday, the world’s second largest economy reported an 18.4 billion USD trade surplus for April. The figure topped expectations which was for a modest surplus of 10.0 billion USD. However, digging deeper into the report, I found out that both imports and exports weakened during the month.

Meanwhile, consumer prices in China for April matched forecasts when it came in at 3.4%. The PPI came in lower at -0.7% versus the -0.5% consensus though.

Of course, the disappointing data from the U.S. might have also weighed down the dollar. The country’s trade balance report for March showed that imports outpaced exports by 51.8 billion USD which was bigger than the forecast for a trade deficit of 49.8 billion USD.

On the slightly-brighter side of things, unemployment claims for last week came in a bit lower than the expected 371,000 consensus at 367,000.

Today we still have a few economic reports from the two countries. In this funky old man’s opinion, good news from China and the U.S., both deemed as significant players in global recovery, will probably spur risk appetite and reduce demand for the dollar’s safety. However, worse-than-expected data could fuel risk aversion even more and hike up demand for the currency. So be sure you don’t miss them!

At 5:30 am GMT, fixed asset investments in China are seen to have grown by 20.5% in April while industrial production and retail sales are eyed to post upticks at 12.1% and 15.1%, respectively.

Then later today, at 12:30 pm GMT, the U.S. PPI for April is anticipated to come in flat while the country’s core CPI is predicted to post a modest 0.2% growth.

Come 1:55 pm GMT, the preliminary University of Michigan Consumer Sentiment index will be on tap and the forecast is for it to print at 76.4.

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The dollar had its ups and its down last Friday as the U.S. printed mixed economic reports. On the charts, it extended its gains against most of its major counterparts, but it lost a bit of ground to the yen and Loonie. What can we expect from it this week?

Though the dollar’s performance was quite mixed last Friday, overall, the markets still seem hesitant to dump it in light of the current risk-off environment.

In other news, the U.S. PPI report came out last Friday, and judging by its soft figures, the Fed may be right to keep door open to more stimulus! Instead of staying flat as most analysts had predicted, the headline figure showed a 0.2% decline in producer prices. Meanwhile, the core figure matched expectations by printing a 0.2% uptick.

As you all know, producer inflation has a tendency to spill over into consumer inflation, so there’s a chance that this weak PPI reading could manifest itself in a weak CPI reading down the line. As a matter of fact, economic nerds are predicting a measly 0.1% reading in the upcoming CPI report, following the previous month’s 0.3% rise in prices.

On the other hand, the preliminary University of Michigan consumer sentiment report wowed the markets with its strong reading. The index rose from 76.4 to 77.8 in May and hit its highest level since 2008! It seems that regardless of the U.S.'s economic problems (unemployment, high debt, etc.), Americans still feel upbeat! No wonder consumer spending has been driving the economy’s growth!

Up ahead, it looks like we’ve got a lot of red flags on the economic calendar for the U.S. this week. Our first taste of U.S. data will come tomorrow at 12:30 am GMT, when the CPI report and retail sales data will be available. Forex Gump wrote an awesome guide to trading the retail sales report that’s a must-read for anyone planning to trade the dollar tomorrow.

On Wednesday, we’ll take a look at housing starts and building permits, as well as the FOMC meeting minutes. Then we’ll wrap our week off with unemployment claims and the Philly Fed manufacturing index on Thursday! With so many potential market-movers on deck, it looks like you’ll have many of opportunities to trade the news. Make the most of 'em, homies! Good luck and happy trading!

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Traders went loco for the dollar like hipsters go crazy for a David Guetta mix in yesterday’s trading. EUR/USD immediately traded lower after opening at 1.2908, ending the day at 1.2836. Heck, we even saw the USDX, which measures the dollar against a basket of currencies, rally to its 9-week high at 81.149!

There wasn’t any economic data to get the dollar’s beat super bumpin’, however, concerns about the euro zone were aplenty yesterday which consequently fueled risk aversion even more.

Speculations about a Grexit have become as real as ever because Greece failed to form a coalition government over the weekend. To top it off, there were reports that Germany has been long preparing for a Grexit but the arrangements it has made have been geared towards protecting investors and not the Greeks. Yikes!

We’ll probably see Greece’s political situation continue to dominate market headlines in today’s trading. So be sure you pay attention to it!

Aside from that, be sure you keep tabs on the high-caliber U.S. retail sales and CPI reports due later today at 12:30 pm GMT as they could potentially affect the dollar’s price action. (Check out Forex Gump’s article on how to trade the reports!)

Consumer spending is seen to have grown in April with the headline consensus at 0.2% and the core reading seen at 0.3%. Inflation is also anticipated to have picked up during the month with the headline figure eyed at 0.1% and the core number predicted at 0.2%.

We also have a few second tier data scheduled which could also affect the dollar’s fate on the charts. The Empire State manufacturing index, also due at 12:30 pm GMT, is seen to come in at 9.3. Then at 1:00 pm GMT, the TIC long-term purchases report is eyed to print at 19.4 billion USD.

Finally, at 2:00 pm GMT, the NAHB housing market index is expected to show that conditions in the housing market somehow improved with the consensus for May higher at 26 than April’s reading of 25.

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Geronimo! EUR/USD fell off a cliff yesterday as the potential “Grexit” and bank run continued to weigh heavily on the foreign exchange market. The pair closed the day at 1.2836, 72 pips lower from its opening price during the Asian trading session.

Greece, as I have mentioned previously, is now at the edge of an exit from the euro zone. If an anti-bailout parliament leader like Evangelos Venizelos of the PASOK party ends up winning the Greek elections, this could very well happen.

In more bad news, the uncertainty surrounding Greece’s situation has caused a small bank run. Since the May 6 election, 700 million EUR was reported to have been withdrawn. Moreover, German Finance Minister Wolfgang was caught on the wires saying that there needs to be a referendum to determine whether Greece should stay or get kicked out of the euro zone.

Economic data from the U.S. was mixed. The core CPI came in at 0.1%, lower than the 0.3% forecast. Meanwhile, the core retail sales showed only a 0.1% gain, and not 0.2% as the market had initially expected.

The Empire State manufacturing index and the TIC long-term purchases beat market forecasts though. The Empire State manufacturing index printed a reading of 17.1 while the TIC report came in with a 36.2 billion USD surplus.

Today, the report to watch out for is the building permits and housing starts report. Building permits are expected to have fallen to 730,000 from 750,000 while housing starts are predicted to have risen to 690,000 from 650,000. The actual results will be published at 12:30 pm GMT.