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EUR/USD Continues to Decline on Coronavirus Fears, Disappointing Eurozone Indicators

September 23, 2020 by

EUR/USD continued to decline today. Market analysts speculated that the decline was a result of coronavirus fears and today’s macroeconomic releases in the eurozone, some of which were rather disappointing. In particular, the services sector in various countries of the region showed notable weakness. The testimony of Federal Reserve Chairman Jerome Powell did not affect the currency pair in any noticeable degree. (Event B on the chart.) As for US macroeconomic data, it was largely positive.

Flash Markit manufacturing PMI rose from 53.1 in August to 53.5 in September, whereas analysts were expecting it to fall to 52.5. Flash Markit services PMI declined from 55.0 to 54.6, in line with expectations. (Event A on the chart.)

US crude oil inventories shrank by 1.6 million barrels last week but remained far above the five-year average for this time of year. That is compared with the forecast decrease of 2.5 million barrels. The stockpiles dropped by 4.4 million barrels the week before. Total motor gasoline inventories fell by 4.0 million barrels last week but also remained above the five-year average. (Event C on the chart.)

If you have any comments on the recent EUR/USD action, please reply using the form below.

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