YouTradeFX | Jan 17, 2013 02:51AM ET
The U.S. economy picked up across much of the country last month, boosted by auto and home sales, even as the outlook for unemployment showed few signs of improvement, the Federal Reserve said. “Economic activity has expanded since the previous Beige Book report, with all 12 districts characterizing the pace of growth as either modest or moderate,” the central bank said yesterday in its Beige Book business survey. In addition, International purchases of U.S. stocks, bonds and other financial assets were more than twice as much as forecast in November as investors sought shelter from a global economic slowdown and the Production at U.S. factories climbed more than forecast in December and the cost of living was little changed, showing the economy gained momentum entering 2013 while inflation remained at bay.
The International Monetary Fund agreed to disburse 3.2 billion euros ($4.3 billion) to Greece after the country made new budget cuts, received more favorable aid terms from European nations and conducted a bond buyback. The IMF board made the decision during a meeting yesterday, it said in a press statement. The funds are part of a joint 130 billion-euro package with European nations, which unblocked their share last month.
EUR/USD
The EUR/USD was trading lower at 1.32809 at the time of writing after the World Bank cut its global growth forecast for 2013, sparking safe-haven demand for the greenback and after the Beige Book reported that the U.S economy is picking up. Moreover, the industrial production in the U.S climbed more than expected and the international purchases of U.S Stocks were also better than forecasted. Today, trading is a bit sticky as investors remained on their guard ahead of the ECB monthly report, which contains the data policymakers evaluate when making monthly interest-rate decisions and after ECB governing council member Ewald Nowotny said that Eurozone’s economic situation had stabilized and added that the euro exchange rate was “not a matter of major concern.” Events likely to affect the movement of the pair on the European market besides the ECB Monthly reports are the bond auctions in Spain and France. Later in the day, the U.S will release its Building Permits (Forecast: 0.903M – Previous: 0.900M), the Housing Starts (Forecast: 0.890M – Previous: 0.861M), the Initial Jobless Claims (Forecast: 365K – Previous: 371K) and the Philadelphia Fed Manufacturing Index (Forecast: 5.8 – Previous: 4.6). If the data in the U.S comes better than expected the pair may dropped to the key level of 1.32000. Investors should remain cautious. The resistance level is at 1.33251 and the support level is at 1.32122.
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