US Leading Indicators and Philly Fed Missed Forecast; USD Mixed
THE TAKEAWAY:[US Philadelphia Fed Index increased at slower pace in April; Leading Indicators fell for the first time in seven months] >[Slow growth in the world’s largest economy towards middle of the year]> [EURUSD Neutral]
Factory activity in the Philadelphia expanded at slower pace in Aprill, as new orders at factories and new constructions permits drop in the region. The Federal Reserve Bank of Philadelphia’s business activity index came in at 1.3 in April following a reading of 2.0 in the previous month. The index surprised market participants as economists widely expected the reading of 3.0. An Index above zero signals above-trend factory growth.
The Philadelphia Fed’s Business Outlook Survey is released monthly, and covers business confidence of manufacturers in eastern Pennsylvania, southern New Jersey and Delaware. The forward-looking index is viewed as one of the first monthly indicators leading up to the ISM Manufacturing report.
In an another report at the same time, the index of U.S. leading economic indicators unexpected dropped in March, for the first time in seven months, indicating there may be some slowdown in the world’s largest economy. The Conference Board’s gauge of the outlook for the next three to six months fell 0.1 percent in March following a 0.5 percent increase in the previous month. The median forecast of economists surveyed by Bloomberg News had called for a 0.1 percent rise.
Manufacturing easing and higher payrolls taxes have dragged on the economic outlook in U.S. Early this week, the IMF lowered its estimated growth for U.S. this year as it predicted government spending cuts will slow down recovery in the short-term. Yet, according to Fed Beige report released yesterday, US expansion remained “modestly” on housing and auto sales.
EURUSD 1-minute Chart: April 18, 2013
Chart created using Marketscope 2.0– Prepared by Renee Mu
The U.S. dollar showed a fairly muted reaction to the reports release, with the EURUSD little changed. At the time this report was written, the EURUSD pair was trading higher at $1.3063.
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--- Written by Renee Mu DailyFX Research