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EUR/USD Drops on Economic Data, Risk Aversion

February 13, 2020 by

US macroeconomic reports released today were good, supporting the US dollar. Annual consumer inflation accelerated from 2.3% to 2.5%. Unemployment claims rose just a little bit and less than was expected. Meanwhile, the euro was under pressure from poor eurozone economic data and risk aversion caused by the coronavirus in China.

US CPI rose by 0.1% in January on a seasonally adjusted basis. Analysts were expecting the same 0.2% rate of growth as in December. (Event A on the chart.)

Initial jobless claims were at the seasonally adjusted level of 205k last week, up slightly from the previous week’s revised level of 203k. The actual value was below the median forecast of 210k. (Event A on the chart.)

Yesterday, a couple of reports were released (not shown on the chart):

Crude oil inventories swelled by 7.5 million barrels last week, exceeding the average forecast of 3.1 million, and were above the five-year average for this time of year. The stockpiles increased by 3.4 million barrels the week before. Total motor gasoline inventories decreased by 0.1 million barrels but remained above the five-year average.

Treasury budget deficit was at $32.6 billion in January, up from $13.3 billion in December. That is compared with the consensus forecast of a $10.7 billion deficit.

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

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