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EUR/USD Retreats After Attempting to Extend Rally

February 28, 2020 by

EUR/USD was rising at the start of Friday’s trading session up until 9:15 GMT. Afterward, the currency pair was in decline. The greenback remained under pressure from expectations of an interest rate cut from the Federal Reserve. Generally positive US macroeconomic data did nothing to help the US currency. Furthermore, core PCE inflation, an indicator closely watched by the Fed, slowed unexpectedly.

Personal income and spending rose in January. Income increased by 0.6%, up from 0.1% in December (revised down from 0.2%). Spending increased by 0.2%, down from 0.4% in the previous month (revised up from 0.3%). Analysts had predicted an increase of 0.3% for both indicators. Core PCE inflation was at 0.1%, whereas experts had expected it to stay unchanged at 0.2%. (Event A on the chart.)

Chicago PMI edged up from 42.9 in January to 49.0 in February — the highest level since August 2019. The actual figure was noticeably above the median forecast of 46.1. (Event B on the chart.)

Michigan Sentiment Index climbed from 99.8 in January to 101.0 in February according to the revised estimate, almost reaching the expansion peak of 101.4 registered in March 2018. That is compared with the forecast figure of 100.7 and the preliminary estimate of 100.9. (Event С on the chart.)

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