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EUR/USD Falls, Continues to Move Down After ECB Policy Meeting

October 29, 2020 by

EUR/USD fell today. Some market analysts explained the decline by the monetary policy meeting of the European Central Bank and the accompanying press conference. (Event B on the chart.) The ECB announced at the press conference that it is going to “recalibrate its instruments” at the December meeting after a fresh round of economic projections. But the currency pair had started its decline before the announcement and just continued its movement in the same direction afterward. As for US macroeconomic data, it was largely positive today, except for a housing report.

US GDP climbed by 33.1% in Q3 2020 according to the advance (first) estimate after sinking by 31.4% in the previous three months. Analysts had predicted a somewhat smaller increase of 32.0%. (Event A on the chart.)

Initial jobless claims were at 751k last week, seasonally adjusted, down from the previous week’s revised level of 791k. The median forecast was promising a higher value of 773k. (Event A on the chart.)

Pending home sales dropped by 2.2% in September instead of rising by 3.1% as analysts had predicted. The indicator surged by 8.8% in the preceding month. (Event C on the chart.)

Yesterday, a report on crude oil inventories was released, showing an increase of 4.3 million barrels last week, which was bigger than the median forecast of a 1.5 million barrels increase. The stockpiles shrank by 1.0 million barrels the week before. Total motor gasoline inventories decreased by 0.9 million barrels. (Not shown on the chart.)

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