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EUR/USD Drops on Brexit Deadlock, Poor Eurozone PMIs

August 21, 2020 by

EUR/USD fell sharply during the European trading session on Friday. Market analysts named a couple of likely reasons for the drop: a deadlock in the Brexit talks between the European Union and the United Kingdom and surprisingly poor eurozone PMIs released by Markit today. In contrast, US PMIs were much better than already optimistic expectations.

Flash readings for Markit manufacturing PMI and Markit services PMI were released today. Markit manufacturing PMI climbed to 53.6 in August from 50.9 in July, above the median forecast of 51.9. Markit services PMI jumped to 54.8 from the neutral level of 50.0, far above the forecast figure of 50.9. Both indicators were at the highest levels in more than a year. (Event A on the chart.)

Existing home sales were at a seasonally adjusted annual rate of 5.86 million in July, up from 4.70 million in the previous month. Market consensus had foreseen a smaller increase to 5.40 million. (Event B on the chart.)

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

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