EUR/USD was slowly trailing down today in the first half of the session, but later rallied and almost erased its losses. US import prices were disappointing, but export prices rose and the federal budget shortage shrank, adding to the appeal of the US currency.

Import prices fell 0.6% in July, following the 2.4% drop in June (revised from 2.7%) and frustrating analysts who expected a small increase by 0.1%. In contrast, export prices rose 0.5% last month after the 1.7 percent decline in the month before. (Event A on the chart.)

Treasury budget deficit was at $69.6 billion in July, being bigger that the June value of $59.7 billion, but much smaller than the forecast of $103.08 billion. (Event B on the chart.)

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