EUR/USD Decline Continues as Concern for E.U. Economy Strengthens

The surge of optimism, brought by signs that China plans to relax yuan’s peg to the dollar, was short-lived and hasn’t helped the euro much. On the other hand, credit rating of BNP Paribas, which was decreased by Fitch Ratings from AA to AA-, reignited fears that the debt crisis will strangle European economy. News from the U.S. weren’t supportive to the dollar, though, as housing sector continues to show signs of weakness. Therefore, the decline of EUR/USD currency pair isn’t that big as it could be. EUR/USD trades now near 1.2274.

Richmond Fed manufacturing index declined to 23 in June from May’s reading of 26. Forex market participants expected it to drop to 21.

Existing-home sales were at a seasonally adjusted annual rate of 5.66 million units in May, down from an upwardly revised surge of 5.79 million units in April. Rather discouraging reading, considering that forecasts promised further growth to 6.17 million.