According to the Philadelphia Federal Reserve Bank, the manufacturing sector in the region has continued to expand steadily. Readings on the general economic index above zero indicate growth. The increase on the reading to 18.9 (expected 18.0) from 17.6, shows that factories continue expanding production and hiring new workers, to keep up with the recovering global economy.
Although a regional activity index, Philly fed tends to have a significant impact on aggregate economic sentiment, and hence investor behavior. However, the reaction in the market was rather muted, with stocks being little changed, but with some signs of strength in the greenback against the major currencies. The EURUSD has come under pressure after the release of the news, dipping from around 1.3660 to as low as 1.3590, marking new day lows. Another fundamental issue leading to increased euroweakness has been again the increased speculation about a potential Greek sovereign default, especially after comments from the Greek premier about seeking EU aid deadlines.