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EUR/USD Reverses Decline, Continues to Rise After Disappointing US Retail Sales

August 14, 2020 by

EUR/USD was falling at the start of Friday’s session but reversed its movement after 9:30 GMT and continued to rise after US retail sales rose less than was expected. Most other US macroeconomic reports were positive but that did not prevent the currency pair from rising higher.

Retail sales rose 1.2% in July. Not a bad reading by itself but a disappointment compared with the median forecast of a 2.0% increase and a slowdown from the previous month’s 8.4% rate of growth (upwardly revised from 7.5%). (Event A on the chart.)

Nonfarm productivity climbed by 7.3% in Q2 2020 — a much bigger rate of increase than 1.5% predicted by specialists. The previous quarter’s drop got a revision from 2.5% to 0.9%. (Event A on the chart.)

Industrial production and capacity utilization rose in July. Industrial production rose 3.0%, slightly less than the median forecast of 3.1%, after increasing by 5.7% in June. Capacity utilization rose from 68.5% to 70.6%, above the forecast rate of 70.3%. (Event B on the chart.)

Michigan Sentiment Index rose to 72.8 in August from 72.5 in July instead of falling to 72.0% as analysts had predicted. (Event C on the chart.)

Business inventories dropped 1.1% in June, matching forecasts exactly, after falling by 2.3% in the preceding month. (Event C on the chart.)

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