The stock market recovery and housing market hurts the dollar. The U.S. currency yesterday continued its correctness, since the recovery of the stock market with the economic literature that ended up exceeding expectations, led to several investors to invest in higher-risk currencies. The EUR / USD came under pressure during the day of Japan and Europe, and handed over most of the day. However, the pair failed to break the support level of 1.3200 area and then reversed its trend. The appreciation of the pair came to pass when the stock market began to take profits.
The Dow Jones Industrial Average advanced 2.61%. Furthermore, data published in the United States, namely, the Pending Home Sales was able to increase the appetite for risk. The figures were released far outperformed expectations, and some investors sold off dollars accordingly. It is noteworthy that fluctuations probably were exacerbated yesterday, because trading volume was low, especially for the holiday celebrated in Japan. It would be advisable to follow closely the evolution of the Aussie (AUD) and New Zealand Dollar (NZD). For today two key events are expected.
The Institute for Supply Management (ISM) will release the Non-Manufacturing PMI. This indicator is essential for analyzing the economic situation in general. It is estimated that the result will show an improvement over the previous publication. On the other hand, the Fed chairman, Ben Bernanke will give a speech on the economic outlook before the congressional economic committee. Bernanke may emphasize economic improvement, and hence the dollar may fall.