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EUR/USD Drops on Income and Spending; Strengthens on Sentiment Indicators

July 31, 2020 by

EUR/USD printed another wave down following a mixed report on personal income and spending in the United States but then switched to an uptrend as an equally mixed set of sentiment indicators were announced.

Personal income decreased by 1.1% in June, while a decline by 0.8% was expected. The drop was better than a -4.4% change reported for May. Personal spending increased by 5.6%, a bit faster than the median forecast of 5.3%, but much slower than the previous month’s gain of 8.5%. Core PCE inflation was at 0.2% after the same value a month earlier and the same forecast. (Event A on the chart.)

Chicago PMI surged from 36.6 to 51.9 in July. This gain exceeded the forecasts pointing at a much modest value — 44.0. (Event B on the chart.)

Michigan Sentiment Index fell to 72.5 in July from 78.1 in June according to the revised estimate. The preliminary reading was 73.2 while forecasts pointed at a 72.9 reading. (Event C on the chart.)

EUR/USD as of 2020-07-31

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