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EUR/USD Jumps as EU Summit Commences

July 17, 2020 by

EUR/USD jumped today. Market analysts explained the jump by hopes that the European Union summit will approve a rescue fund that should help the economy of the region to recover. As for today’s US macroeconomic data, it was not particularly great, unlike yesterday.

Housing starts and building permits increased in June. Housing starts were at a seasonally adjusted annual rate of 1.19 million, up from the revised May estimate of 1.01 million (0.97 million before the revision). Building permits were at a seasonally adjusted annual rate of 1.24 million, up from 1.22 million. The median forecast was at 1.17 million for housing starts and 1.30 million for building permits. (Event A on the chart.)

Michigan Sentiment Index fell to 73.2 in July from 78.1 in June according to the preliminary estimate instead of rising to 79.0 as analysts had promised. (Event B on the chart.)

Yesterday, several reports were released (not shown on the chart):

Retail sales jumped by 7.5% in June. It was a bigger increase than 5.0% predicted by experts but smaller than the previous month’s revised gains of 18.2% (17.7% before the revision).

Philadelphia Fed manufacturing index fell to 24.1 in July from 27.5 in June. Still, it was above the median forecast of 20.0.

Initial jobless claims were at 1,300k last week, seasonally adjusted, down from the previous week’s revised level of 1,310k. Specialists had promised a bigger decrease to 1,250k.

Business inventories decreased by 2.3% in May, matching forecasts exactly, after falling by 1.4% in the preceding month.

Net foreign purchases were at $127.0 billion in May. That is compared with -$130.8 billion in the previous month.

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

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