Forex News – U.S. home sales and Philly Fed manufacturing data fall

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The euro plummeted against the dollar and the Swiss franc after the release of the Philadelphia Federal Reserve Bank manufacturing index. The data showed factory activity in the U.S. Mid-Atlantic region plummeted in August, falling to the lowest level since March 2009.

The euro spiked down from a pre-news high of 1.4347 to 1.4327, then extended losses to 1.4274 by 14:25 GMT, as risk aversion pushed investors to the safe haven U.S. reserve currency.

Meanwhile, the dollar fell against the Swiss Franc and Yen. USDCHF fell from 0.7902 to 0.7856 and USDJPY fell to 76.45 from 76.60.

Factory activity in the U.S. Mid-Atlantic region fell in August, declining to the lowest level since March 2009.

The Philly Fed said its business activity index dropped to minus 30.7 from positive 3.2 the month before and was far below forecast for positive 3.7.

It is seen as one of the first monthly indicators of the health of U.S. manufacturing leading up to the larger national report by the Institute for Supply Management.

A separate report released at the same time at 14:00 GMT showed U.S. existing-home sales unexpectedly dropped in July.

U.S. existing-home sales in July unexpectedly dipped due to cancellations of pending contracts by potential home buyers who are uncertain about their jobs and their income.

The National Association of Realtors said sales fell 3.5 percent month over month to an annual rate of 4.67 million units. June’s sales were upwardly revised at a 4.84 million-unit rate.

Economists had expected sales to rise 3.8 percent to a 4.90 million-unit pace. Compared to July 2010, sales were 21 percent higher.